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■> 9 * 






Experience with 
Mutual Benefit Associations 
in the United States 


Research Report Number 65 



National Industrial Conference Board 


NEW YORK 








National Industrial Conference Board 

10 EAST 39th STREET, NEW YORK 
BRANCH OFFICE 

SOUTHERN BUILDING, WASHINGTON, D. C. 

T HE National Industrial Conference Board is a co-operative 
body composed of representatives of national and state in¬ 
dustrial associations, and is organized to provide a clearing house 
of information, a forum for constructive discussion, and ma¬ 
chinery for co-operative action on matters that vitally affect 
the industrial development of the nation. 

Frederick P. Fish Chairman 

Loyall A. Osborne Vice-Chairman 

John W. O’Leary Vice-Chairman 

James H. Perkins Treasurer 

Magnus W. Alexander Managing Director 

AFFILIATED ORGANIZATIONS 

American Cotton Manufacturers Association 
American Electric Railway Association 
American Hardware Manufacturers Association 
American Malleable Castings Association 
American Paper and Pulp Association 
American Pig Iron Association 
Electrical Manufacturers Council 
Institute of Makers of Explosives 

Manufacturing Chemists’ Association of the United States 
National Association of Cotton Manufacturers 
National Association of Farm Equipment Manufacturers 
National Association of Finishers of Cotton Fabrics 
National Association of Manufacturers of the United States 
of America 

National Association of Sheet and Tin Plate Manufacturers, Inc. 
National Association of Wool Manufacturers 
National Automobile Chamber of Commerce 
National Boot and Shoe Manufacturers Association of the 
United States, Inc. 

National Electric Light Association 
National Erectors’ Association 
National Founders Association 
National Industrial Council 
National Lumber Manufacturers Association 
National Metal Trades Association 
Railway Car Manufacturers* Association 
Rubber Association of America, Inc. 

Silk Association of America 

Tobacco Merchants Association of the United States 
Associated Industries of Massachusetts 
Associated Industries of New York State, Inc. 

Illinois Manufacturers’ Association 
Manufacturers Association of Connecticut, Inc. 


EXPERIENCE WITH 
MUTUAL BENEFIT ASSOCIATIONS 
IN THE UNITED STATES 


Research Report Number 65 


/ 


National Industrial Conference Board 


NEW YORK 


HD'^ 

to 


Copyright, 1923 

National Industrial Conference Board 


©Cl A773284 



Published December , 1923 

JAN-4 *24 / 


uo 


Foreword 


The present report forms one of a general group of studies by 
the Conference Board covering the technique of and practical 
experience with those organized devices and movements, such 
as profit-sharing systems, works councils, unemployment in¬ 
surance funds, etc., developed by employers and workers in 
American industry for the betterment of industrial relations. 
Among these, mutual benefit associations for the collective 
protection of industrial workers against losses due to sickness 
and death have in recent years become an important feature 
of betterment activities in many American industrial establish¬ 
ments. 

In this report the Conference Board offers a comprehensive 
survey of the significant features of the purpose, organization, 
administration and results of such associations, as revealed in 
the experience of employers and employees. Since, as this re¬ 
view makes clear, such associations are not merely mechanisms, 
but organisms which grow out of a collective effort to fulfill 
specific human needs and which must adapt themselves to local 
conditions, nothing said in this report by way of evaluation of 
specific features or general results of mutual benefit associa¬ 
tions should be taken as a recommendation by the Conference 
Board of particular forms of such associations as compared with 
other forms or other methods of collective effort in this type of 
industrial betterment work. While mutual benefit associations 
have undoubtedly been of value in meeting the need for pro¬ 
tection in the contingencies of the industrial worker’s life, each 
industry and each establishment must meet this problem in.its 
own way. “A Manual for Mutual Benefit Associations,” issued 
as a subsequent report, affords a practical guide to employers 
and employees who may wish to establish a mutual benefit 
association. 

This report is the result of an investigation conducted by 
Mr. H. R. Rutherford, and assistants, of the Conference 
Board’s Research Staff, under the supervision of the Board s 
Staff Economic Council. 

iii 


In the preparation of its reports, the National Industrial 
Conference Board avails itself of the experience and judgment 
of the business executives who compose its membership and of 
recognized authorities in special fields, in addition to the 
scientific knowledge and equipment of its Research Staff. The 
reports of the Board thus finally represent the result of scien¬ 
tific investigation and broad business experience, and the 
conclusions expressed therein are those of the Conference Board 
as a body. 


IV 


CONTENTS PAGE 

Introduction. 1 

I. General Summary. 5 

Purposes of Associations. 5 

Membership Features. 5 

Constitution and Administration. 7 

Dues and Benefits. 8 

Medical Service. 9 

Supervision of Members. 10 

Commercial Reinsurance. 12 

State Supervision or Assistance. 12 

Results of Mutual Benefit Associations. 12 

II. Purposes of Mutual Benefit Associations. 15 

III. Organization and Operation. 18 

Compulsory vs. Voluntary Membership. 18 

Advantages of Compulsory Membership. 18 

Disadvantages of Compulsory Membership. ... 20 

Membership Restrictions. 22 

Restriction on Basis of Earnings. 22 

Restriction on Basis of Age. 23 

Restriction on Basis of Sex. 24 

Restriction on Basis of Period of Employment. 25 

Restriction on Basis of Physical Condition. 25 

Miscellaneous Restrictions. 26 

Application for Membership. 27 

Effect of Termination of Employment on Member¬ 
ship. 28 

Temporary Lay-off. 29 

Voluntary Termination or Discharge. 30 

Conditional Retention of Membership. 31 

Refunds of Dues and Assessments. 32 

Payment of Partial Benefits. 33 

Effect of Re-employment. 33 

Unconditional Retention of Membership. 34 

Effect of Termination Due to Disability. 35 

Effect of Failure to Pay Dues. 37 

Time Limit for Arrears. 37 

Penalties. 37 

Reinstatement. 38 





































Contents —continued page 

Interesting Employees in the Association. 39 

Special Methods in Use. 41 

Commercial Reinsurance. 44 

Distribution of the Risk. 44 

Catastrophic or Epidemic Hazard. 45 

Rate of Benefits. 46 

Restrictions on Membership. 48 

Restrictions on Benefits. 48 

Percentage of Employees Covered. 49 

Cost. 49 

State Supervision or Assistance. 49 

IV. Administration. 51 

Division of an Association into Sections. 51 

Centralized Association for Several Plants of One 

Company. 52 

Officers. 53 

Eligibility. 54 

Number. 55 

Election. 56 

Duties. 58 

Compensation. 60 

Bonding of Officers. 62 

Term of Office. 62 

Committees. 63 

Meetings. 64 

Handling of Funds. 65 

Custody of Funds. 66 

Deposit of Funds. 67 

Investment of Funds. 68 

Withdrawal of Funds. 68 

Auditing of Accounts. 69 

V. Contributions to Funds. 71 

A. Contributions by Members. 71 

Dues and Assessments. 71 

Combination of Dues and Assessments. 71 

Dues Only. 74 

Declaration of Dividend or Suspension of Dues. 74 
Methods of Collecting Dues or Assessments. . . 77 

Advantages of Payroll Deduction. 78. 

Disadvantages of Payroll Deduction. 80 

vi 







































Contents —continued page 

Intervals at which Dues are Paid. 81 

Classification of Dues and Assessments. 82 

Classification on Basis of Age. 82 

Classification on Basis of Wages. 83 

Classification on Basis of Length of Service. . 83 

Other Classifications. 84 

Initiation Fees. 84 

Annual Initiation Fee. 84 

Graduation According to Age. 85 

Graduation According to Rate of Benefit. 85 

Other Variations of Initiation Fees. 87 

Effect of Initiation Fee. 87 

Revenue from Social, Recreational or Other Ac¬ 
tivities . 87 

Fines for Arrears, and Reinstatement Fees. 90 

B. Contributions by Employers. 90 

Contribution According to Number of Members. 90 
Company Contribution on Basis of Members’ 

Contributions. 91 

Contribution on Basis of Amount of Benefits Paid 92 
Contribution in the Form of Life Insurance.... 93 

Contribution of Lump Sum. 93 

Contribution on Basis of Aggregate Wages of 

Members. 93 

Payment of Interest by Company. 94 

Company Guarantee of Benefits. 94 

Other Forms of Company Contribution. 95 

Company Contribution on Organization of As¬ 
sociation. 96 

Company Contributions Refused by Associations 96 
VI. Company Participation in Administration of 

Associations. 98 

Participation Confined to a Minimum. 98 

Administration by Members Only.100 

Company Representation on Governing Body. .. . 101 

Complete Company Control.104 

General Opinion on Company Control.104 

VII. Benefits.105 

Temporary Disability Benefits.105 

Adequacy of Benefits.106 

vii 































Contents —continued page 

Relation of Benefits to Wages.107 

Relation of Benefits to Other Insurance.108 

Term for Which Benefits are Paid.110 

Extension of Benefit Payments.110 

Continuation of Disability.Ill 

Death Benefits.113 

Payment of Death Benefit after Full Disability 

Benefits.114 

Contestability of Death Claims.115 

Execution of Release or Waiver.116 

Medical Attendance.117 

Free Medical Attendance.117 

Assumption of Hospital Expenses.118 

Dental and Other Service.118 

Preventive Medical Work.119 

Physical Examination on Entrance to Associa¬ 
tion.121 

Periodic Physical Examinations.123 

Preventive Campaigns.123 

Relation of Plant Medical Department to Medi¬ 
cal Work.124 

Company Support in Medical Work.125 

Benefits for Member’s Dependents.125 

Length of Membership Required for Benefits. ... 126 

Notification of Disability.128 

Restrictions of Benefits for Certain Diseases or 

Conduct.129 

Supervision of Members while Drawing Benefits. . 130 

Waiting Period.133 

VIII. Results of Mutual Benefit Associations.136 

Assistance to Members in Sickness, Accident or 

Death.136 

Elimination of Casual Relief Subscriptions.137 

Indirect Effects on Efficiency, Production, Labor 

Turnover and Industrial Relations.138 

Effect on Morale.141 

Effect on Absenteeism.142 

Attitude of Members Toward Associations.144 

Appendix—I ndustrial Concerns Which Furnished Data 
Regarding Mutual Benefit Associations.147 

viii 

































Experience with 
Mutual Benefit Associations 
in the United States 


INTRODUCTION 

The need of organized and systematic means of protection 
against the losses due to sickness, accident, death or involuntary 
unemployment in modern industrial society has long engaged 
the thought of workers, employers and students of social prob¬ 
lems, and has led to the development of various kinds of collec¬ 
tive effort to these ends, on the part of both governmental and 
private agencies. In the United States, governmental effort in 
this direction has so far been confined to workmen’s compensa¬ 
tion laws, now in operation in forty-two states . 1 The purpose 
of these laws is, in general, to provide protection only against 
losses due to injury, illness and death arising out of or in course 
of employment. Forms of state protection against unemploy¬ 
ment are under consideration in several states . 2 As regards the 
contingencies of sickness, accident or death not directly con¬ 
nected with employment, various forms of private collective 
protection or relief have been developed by workers’ organiza¬ 
tions, individual employers, fraternal and other similar so¬ 
cieties, beside that offered by commercial insurance companies. 

This report is concerned with that type of collective protec¬ 
tion and relief known as mutual benefit associations, which has 
been developed through the initiative of workers or employers 
in industrial establishments in the United States. As used in 
this report, the term “mutual benefit association” means an 
organization of employees within an industrial establishment, 
formed for the purpose of providing protection for its members 
in case of sickness, accident or death. 

Although their essential purpose is that just mentioned, the 
constitution, organization, administration, form of protection 
iSee National Industrial Conference Board, Research Reports Nos. 1 and 61. 
2 See National Industrial Conference Board, Research Report No. 51. 



and functions of such organizations, and their relation to the 
establishment differ widely. Employment within the plant in 
which the association operates is necessary for entrance to it, but 
termination of employment may not necessarily terminate mem¬ 
bership in the association. Other benefits, in addition to those 
provided in case of sickness, accident or death, may accrue to the 
members, such as the provision of free medical attendance, 
payments to members while unemployed, the payment of hospi¬ 
tal expenses or the granting of loans at reduced rates of interest. 
The association may engage in social and recreational activities, 
partly with the object of building up and maintaining an esprit 
de corps among its members and partly for the purpose of se¬ 
curing additional income. 

Two main types of associations may be distinguished, differing 
according to the method by which they are financed and 
administered: those financed entirely by employees and ad¬ 
ministered solely by them, and those in which the employer either 
contributes in a financial way to their support or participates in 
their administration. In this classification only cash contribu¬ 
tions on the part of the employer are regarded as financial sup¬ 
port. In practically every association the employer pays the 
operating expenses of the association. The work of the associa¬ 
tion officers is usually done on company time, and in other 
indirect ways the company assists the association. Such 
assistance, however, is not regarded in this report as constituting 
a contribution on the part of the employer. 

Although participation or non-participation of employers may 
be regarded as the main difference between associations, certain 
other differences in their method of operation are also of interest. 
A mutual benefit association is in most instances an organization 
distinct and separate in itself. In some cases, however, it may 
be auxiliary to a works council. Again, certain mutual benefit 
associations are terminated and a new association formed at the 
end of each year or on the death of a member. This procedure 
is in marked contrast to that which usually obtains where the 
life of the association is conditioned only by its ability to pay 
its obligations. 

Mutual benefit associations may be further classified accord¬ 
ing to the way in which the insurance is carried. In some plants 
this is done by an outside insurance company. In others the 
association itself carries the risk. The vast majority of the 

2 


associations considered in this report belong to the latter class. 
Some associations carry their own sickness and accident in¬ 
surance but insure in an insurance company for death benefits. 

A study of the history of mutual benefit associations shows 
that while the older associations, those dating back twenty or 
thirty years, were organized entirely on the initiative of the 
employees, those of more recent date have been formed at the 
suggestion of the management. This is a natural outcome of 
the growth in the size of industrial establishments in the last 
twenty-five years and of the increasing attention which manage¬ 
ment has devoted to the study of industrial relations. In the 
case of a small plant where the employees were all acquainted 
with each other, the environment was favorable for the develop¬ 
ment of associations by the workers themselves. With the 
increase in the size of industrial concerns this “family spirit” 
gradually disappeared. The lack of a common interest among 
employees has come to be more and more realized and studied 
by management with a view to establishing plant esprit de corps 
which is so necessary for satisfactory industrial relations. As a 
result there has been a rapid growth in the number of mutual 
benefit associations in industry. It is impossible to determine 
accurately the number of such associations in operation today, 
but a conservative estimate would place their number in in¬ 
dustrial concerns alone at between 700 and 800. They have 
thus become a definite and quite general form of cooperative 
effort in American industry, and because of their scope and 
functions and their position in industrial establishments they 
may be considered to have, actually or potentially, an important 
bearing on the status of the industrial workers and on the 
relations between them and their employers. 

The investigation, the results of which are presented in this 
report, is a study of the organization, operation and experience 
of a representative number of such associations in order to 
ascertain the general purposes which employers or workers have 
had in mind in forming them, the features of organization 
and administration which have been found effective or detri¬ 
mental to these purposes, the services which they render to 
employees, and their bearing on productive efficiency, morale, 
loyalty and other aspects of industrial relations. In all, 382 
associations were studied in the investigation. Information 
regarding them was derived from study of their constitutions 

3 


and by-laws, from correspondence with company officials and 
officers of the associations, and in some instances from field 
visits and interviews with the managements and the workers. 
Because of the great variety of forms of organization and ad¬ 
ministration, and the variation in dues and benefits and activities 
among the associations, no attempt is made in this report to 
give an exhaustive account of the details of the associations 
studied. It was found, indeed, that such differences as exist 
were largely of secondary importance, and the main task of the 
investigation has been to reveal those features in the form and 
operation of the associations which the experience of their 
members or the company managements has shown to be signifi¬ 
cant for their success or failure. 1 

It has, of course, been impossible to measure this success or 
failure in hard and fast terms. The main purpose of such 
organizations is to afford protection to their members, and the 
continued existence of an association naturally implies its suc¬ 
cess in this regard. The relative cost of the protection afforded 
by this type of cooperative effort, as compared with that which 
might be obtained through other means of insurance, is difficult 
to measure because of the wide variation in the form and con¬ 
ditions of the associations, and because of the intangible factors 
of morale, group spirit, sympathy and cooperation of the 
management, social features, etc., which distinguish each asso¬ 
ciation from every other, and which separate this type of co¬ 
operative effort from most others, such as commercial insurance, 
for example. It is these intangible features of the mutual benefit 
association which may determine the measure of its success, 
but they can be estimated only through the opinions of em¬ 
ployers and employees. The attitude of the management and 
men toward the association is, therefore, the best measure of its 
success from the point of view of industrial relations, and it is 
from this point of view that their study has been approached 
in this investigation. 

The Conference Board wishes to make grateful acknowledg¬ 
ment of the courteous cooperation of officers of mutual benefit 
associations and of companies who have supplied the information 
which is the basis of this report. 

J On the basis of this experience, practical recommendations for the guidance 
of employers or employees in establishing and administering a mutual benefit 
association have been drawn up and published in Research Report No. 66, 
“A Manual for Mutual Benefit Associations,” which forms a supplement to 
the present report. 


4 


I 


GENERAL SUMMARY 

Purposes of Associations 

This study of mutual benefit associations indicates that 
the main thought among both workers and management in 
forming or in assisting them is to establish a systematic, co¬ 
operative means of providing employees or their dependents 
with some measure of protection against losses due to accident, 
illness or death, in addition to the protection afforded by work¬ 
men’s compensation laws or other agencies. It has been felt 
also that, by virtue of the systematic character of such provision, 
the possible waste, injustice or annoyance of casual relief sub¬ 
scriptions would be obviated. In addition, employers have 
considered that the cooperative character of such provision, 
enlisting many or all of the workers and sometimes the manage¬ 
ment of a single establishment in the common object, might 
indirectly have a favorable effect on the interest, loyalty, and 
esprit de corps of the entire organization and thus improve in¬ 
dustrial relations. Finally, employers have felt that the assur¬ 
ance of relief and the actual protection afforded by such asso¬ 
ciations nourish confidence and prevent discouragement and 
discontent in the worker, thus producing an indirect effect on 
productivity and industrial relations. 

Although they have been realized in many cases, the possi¬ 
bility of the latter results is not usually put before the objective 
of protection and relief, and the value of mutual benefit asso¬ 
ciations is not tested by them alone. 

As regards the features of the organization, administration, 
relation to management, schedule of benefits and dues and other 
activities of associations, which may influence their success or 
failure, the following general considerations are suggested by 
the experience of the associations covered in this investigation: 

Membership Features 

Voluntary membership is generally preferred by both employer 
and employees to compulsory membership. Compulsory mem¬ 
bership makes for greater stability of funds than a purely 

5 


voluntary association, because the latter tends to include 
chiefly those who feel the need of provision, and so makes for 
an unfavorable selection of risks. Compulsory membership, 
moreover, brings within an association the thriftless type of 
individual who will not voluntarily make provision for the 
future. These advantages, however, are usually more than 
counterbalanced by the lack of interest and enthusiasm which 
may characterize the attitude of the members toward a com¬ 
pulsory association. 

Most mutual benefit associations have found it advisable, in 
order to protect themselves against having an unduly large 
percentage of members who are liable to claim benefits, to set a 
maximum age limit for employees who wish to join. An excep¬ 
tion to this is frequently made when a mutual benefit association 
is being organized, at which time all the workers who apply for 
membership within, say, thirty days, may be admitted. There¬ 
after a maximum age limit of fifty or fifty-five years is usually 
fixed, or some arrangement made whereby an employee who 
joins at the age of fifty or fifty-five or over either pays higher 
dues than the younger members or receives only a certain per¬ 
centage of the regular schedule of benefits. No restriction, of 
course, is placed upon the younger employees joining the asso¬ 
ciation, as it has been found to be highly essential that an asso¬ 
ciation recruit the larger part of its membership from among this 
group. 

Although a number of associations restrict membership to 
male employees, experience reveals no valid reason for excluding 
women from membership under proper safeguards. 

Experience indicates that membership should be restricted 
to those who remain in service of the company. 

While it might be possible for a mutual benefit association 
to allow members who leave a plant to retain their rights to 
death benefits by paying a higher rate of dues, as is done by 
insurance companies in the case of an employee who leaves 
a plant in which the workers are covered by a group life con¬ 
tract, it is extremely doubtful if any satisfactory plan could 
be evolved whereby a member of an association leaving a plant 
could retain his rights to sickness and disability benefits. 
f Another reason why mutual benefit associations have found 
it unfeasible to permit members to retain membership after 
they leave the plant is that the association has no effective way 

6 


of administering and supervising the benefit claims of workers 
who may be employed in another company and perhaps in 
another town or city. The nature of the work in which em¬ 
ployees who leave a company engage is also an important factor. 

While membership in the association should, therefore, in 
general be restricted to employees, refunds may be made to 
members who have paid their dues in advance and who leave 
the company before the termination of the period which has 
been covered by such advance payment. 

Constitution and Administration 

The form of an association and its constitution and by-laws 
are of far less importance in gaining success than the personality 
of the officers. While the association must be devised to fit the 
needs of the organization, its success is primarily dependent on 
whether those individuals who administer it are personally and 
vitally interested in making it a success. 

In the last analysis, a mutual benefit association, to achieve 
its primary purpose, must “sell” insurance to the workers in a 
plant. Salesmanship is required in organizing the association 
in such a way as to gain the interest of the employees, and to 
induce new employees to become members. Various methods, 
including the use of plant publications, contests in securing new 
members, instruction of the foremen with respect to the organ¬ 
ization, sending letters to new employees, explaining the asso¬ 
ciation to them and urging them to join, have been utilized. 
Whatever the methods adopted, their success depends to a very 
large extent upon the personality of those individuals whose 
task it is to apply them. 

Such person or persons must be capable, energetic and actively 
interested in the work of the association. The officers should be 
of this type, since it is upon them that the responsibility of 
commending the association to the workers in the plant must 
devolve. It is of minor importance whether an association has 
a full complement of officers; or not. What is of the greatest 
importance is that the officers, whatever their number, be 
enthusiastic about the benefit association idea themselves; that 
they be willing to devote time and energy to their duties; and 
above all that they appreciate the necessity of keeping the 
membership of the association as nearly as possible at 100% 
of the eligible employees. 


7 


Another factor affecting the success of a mutual benefit asso¬ 
ciation is that it be based on sound accounting and actuarial 
principles and have competent advisors for this purpose among 
its officers. 

Experience indicates, on the whole, that it is advisable, be¬ 
cause of the added confidence and prestige among employees 
that accrues to associations managed entirely by themselves, 
and because of the training which employees obtain in the 
administration of such organizations, that company participa¬ 
tion in administration be confined to a minimum. The company 
can best serve the association by standing ready to consult and 
advise with the employee officers at any time and furnish them 
whatever assistance is possible. 

Dues and Benefits 

Because the levying of assessments makes it impossible for a 
member to tell with certainty what the yearly cost of the asso¬ 
ciation will be, the method of raising revenues from dues has been 
found preferable, as a rule. The greater part of the revenue, 
at least, should be raised from dues, recourse being had to assess¬ 
ments only when the necessity arises, or when the funds in the 
treasury fall below a certain figure, as in the event of an epi¬ 
demic. 

The statements of employers, officers and members of mutual 
benefit associations indicate that the most satisfactory method 
of collecting dues is the payroll deduction method, where this is 
not prohibited by state laws. This takes less time than the 
collection of dues by departmental collectors and assures regu¬ 
larity of payment. 

Field days, excursions, dances and entertainments are run 
by many associations in order to build up and maintain the 
esprit de corps of the organization and to supplement the 
revenue derived from dues and assessments. Experience shows, 
however, that social and recreational activities should not have 
to be undertaken in order to raise revenue because the schedule 
of dues and assessments is inadequate. 

Experience has shown it desirable that dues, in the first 
instance, should be made somewhat higher than appear to be 
absolutely necessary, so that, if a revision of the schedule has 
to be made, it may be in the direction of lowering or remitting 
dues for a certain period, or declaring dividends, rather than 

8 


increasing dues, levying extra assessments or shortening the 
time for which benefits are to be paid. 

The benefits paid by a mutual benefit association should be 
fixed with relation to the current cost of living among industrial 
workers and to the income of the individual worker. Many 
associations which have been in operation over periods ranging 
from ten to twenty-five years are still paying the same rates 
of benefits as they did at the time they were organized. Irre¬ 
spective of the adequacy of benefits of $5 or $6 a week, which 
are the predominating rates in the associations studied, a uni¬ 
form rate of benefits does not recognize the difference in the 
standard of living of an employee who earns $10 a week and 
one who earns $30 a week. Experience suggests that a more 
equitable arrangement would be to relate both dues and benefits 
to the average weekly earnings of the members, and to classify 
membership as well as dues and benefits on this basis. In order 
to discourage malingering, benefits may be restricted to a certain 
percentage of wages, 50%, 66^% or 75%, as may be deemed 
advisable. 

Medical Service 

There is a growing appreciation on the part of some of the 
more forward-looking associations that they can be of greater 
service to their members by engaging in preventive health activi¬ 
ties. These associations find that work of this kind, besides 
being commendable from the humanitarian viewpoint, is 
profitable from a commercial standpoint as well. 

The first step in this direction is medical examination of all 
applicants for membership in an association to ascertain what 
weaknesses or defects are in need of care. These disabilities 
need not be a cause of exclusion from membership in the asso¬ 
ciation, but employees may be allowed to become members 
upon signing a waiver releasing the association from the pay¬ 
ment of benefits for such physical defects as may be revealed by 
the examination, and employees may be assisted to remedy or 
cure such defects or ailments in order that they may become 
entitled to full membership. 

Medical examination on entrance to the association should 
be followed by further examinations held at yearly or half- 
yearly intervals. Such periodic examinations may provide the 
members with vital information regarding their health and enable 

9 


them to take any precautions that may be necessary against 
disease. 

Another manner in which a mutual benefit association may 
enlarge its program so as to include measures to prevent sickness 
or lessen its duration is in the provision of free and competent 
medical attendance for all disabled members. In many associa¬ 
tions, the cash benefits paid are not adequate to permit proper 
medical advice and treatment for the members. Very often 
the physicians are incompetent, and the consequences of in¬ 
accurate diagnosis and erroneous treatment, besides being 
serious for the members themselves, are reflected upon the asso¬ 
ciation in a prolonged term of disability payments. 

Whether a mutual benefit association should retain a phy¬ 
sician of its own or whether the intiative in engaging in pre¬ 
ventive medical work should come from the plant medical 
department, largely depends on the conditions within the 
individual plant. 

Although the broadening of the functions of the mutual 
benefit association has not progressed to the same extent as in 
the case of the industrial physician, the success of mutual bene¬ 
fit associations is coming more and more to be measured in the 
same way. Few associations have as yet inaugurated any of 
these plans, but it is evident that any measure taken to raise 
the standard of health among the workers in a plant is bound 
to react favorably on the benefit association. 

Supervision of Members 

Experience shows that, while it is necessary to the success 
of an association that benefits be paid promptly and with as 
little red tape as possible, the association must protect itself 
against malingering. To this end many associations pay bene¬ 
fits only to those who have been members for a specified period 
of time, varying among the associations from three days to a 
year. A probation period of this kind is undoubtedly desirable, 
since even medical examination will not in all cases reveal 
incipient diseases. There seems to be no adequate reason, 
however, for making this period as long as one year. While 
two weeks* membership before members are entitled to benefits 
may be accepted as a necessary protection for the association 
in the case of sickness benefits, no probation period seems to 
be necessary in the case of accident benefits. A longer member- 

10 


ship may be justifiably required of members before they become 
entitled to death benefits. The length of this period is neces¬ 
sarily determined by the individual association, taking into 
account its rate of dues and benefits and the length of the “wait¬ 
ing period.” 

The length of time within which a disabled member must 
notify the association of his disability is of importance in the 
supervision of benefit claims. It has been found desirable that 
associations receive such notification of disability within, at the 
maximum, seven days from its commencement. Provision may 
be made for exceptions to this rule, but otherwise rigid ad¬ 
herence is necessary. 

Practically all mutual benefit associations require a doctor’s 
certificate from disabled members before benefits are paid. 
Whatever arrangements an association may make for securing 
the services of a physician in this connection, experience shows 
that the association should reserve the right to have the disabled 
member examined by a doctor of its own choice, whose decision 
should be final. 

Further supervision of members drawing benefits is obtained 
in most associations through the medium of a sick or visiting 
committee, composed of a number of members of the association. 
Although, strictly speaking, a physician is the only individual 
who is competent to determine whether an employee is maling¬ 
ering or not, the sick committee has an important function to 
fulfill in the administration of an association. As fellow workers 
of the members drawing benefits, the committee is quite often 
able to form a more accurate judgment of a case than the 
attending physician. 

In determining the length of the waiting period, i. e., the num¬ 
ber of days at the commencement of a member’s disability for 
which he receives no benefits, the relation of this period to dues 
and benefits should be kept in mind. 1 his is a subject for ac¬ 
tuarial investigation in each association. 

The general opinion is that the waiting period should be long 
enough to discourage malingering and at the same time should 
not be so long as to work a hardship on those who suffer from 
minor injuries and illnesses. Free medical attendance for all 
members who are disabled, accompanied by effective supervision 
of claims, does much to eliminate malingering, and it is to the 
interest of the association to see that all members who are sick 

11 


or disabled are provided as soon, as possible with medical care 
in order to arrest the development of the disability and thereby 
lessen the amount that the association might otherwise have to 
pay out in benefits. 

Commercial Reinsurance 

Experience suggests that, because of the better distribution 
of the risk, the better provision for catastrophic or epidemic 
hazard, the higher rate of benefits, higher death benefits, the 
fewer restrictions necessary on membership, or on the payment 
of benefits, and the larger percentage of employees who secure 
protection, it is advisable for benefit associations, except in the 
larger plants, to reinsure, through group insurance in a commer¬ 
cial carrier, the payment of death benefits, and also the payment 
of disability benefits, unless the association has substantial 
support or guarantee of assistance from the employer. 

State Supervision or Assistance 

It is not possible to determine the value of state supervision 
of or assistance for mutual benefit associations or similar 
measures for relief of workers and their families in sickness, 
accident or death, because data are lacking. Only one state has 
experimented in this field. In Massachusetts, as a result of an 
investigation of the subject of non-contributory health insur¬ 
ance, the legislature in 1918 recommended the encouragement 
and promotion of mutual benefit associations among the em¬ 
ployees in industrial plants in that state. The Savings Bank 
Life Insurance Division has been instrumental in organizing a 
large number of mutual benefit associations in Massachusetts, 
and in these associations the sickness and accident benefits are 
paid from the association funds, whereas the life insurance is 
provided through the savings banks under a group policy issued 
to the employer. In this instance the cost of the sickness and 
accident benefits is carried by employer and employee jointly 
and the cost of the life insurance by the employer alone. 

Results of Mutual Benefit Associations 

The mutual benefit association has undoubtedly proven itself 
to be an effective instrument for placing on an equitable and 
businesslike basis the relief of employees incapacitated through 
sickness or accidents. Both employers and employees are unani- 

12 


mous in their statements that it is much superior to the uncertain 
and possibly unjust system of “passing the hat,” in order to 
obtain such relief. It provides the employee with the oppor¬ 
tunity of insuring himself against sickness, accident and death, 
thereby making it unnecessary for him to rely upon charity 
when ill or injured, and at the same time dispelling the fear of 
dependence. 

While it is difficult to establish any direct connection between 
the mutual benefit association and production, efficiency or 
labor turnover, it is highly significant that not a few employers 
are of the firm belief that the effect of benefit associations upon 
these factors is, nevertheless, considerable, though intangible and 
not to be measured in dollars and cents. 

Employers believe that the interest manifested by manage¬ 
ment in the association, expressed either through direct contribu¬ 
tions to it or through the provision of facilities to enable it to 
conduct its business on an efficient basis, is of inestimable value 
in building up confidence and good-will in the plant. Through 
the sympathetic contacts established with members who are 
drawing benefits, and the “family spirit” which is fostered by an 
association's social activities, at which management and em¬ 
ployees meet on an equal footing as members of one group with 
a common object, an esprit de corps is created among employees 
that is of permanent and lasting value. Employers who were 
of the opinion that mutual benefit associations exercise a 
beneficial effect upon the relations of men and management 
also stated that the business meetings of the associations, at 
which common problems are discussed by management and 
employees, further served to establish in the minds of the latter 
the sense of a community of interest between employer and 
employed. 

Productive efficiency is believed to be improved as a result 
of the freedom from worry regarding the consequences of 
disability, which the association produces among its members. 
This feeling of independence is reflected in their ability to con¬ 
centrate more efficiently upon the work in hand. It also results 
in a better morale among the members. The protection in 
case of illness, accidents and death, afforded by an association, 
is one of the factors that makes a plant “a good place to work” 
and is one of the bonds that link the worker to the plant. There 
is no evidence that in the absence of adequate wages and satis- 

13 


factory working conditions a mutual benefit association would 
act as a deterrent upon a member who contemplates leaving a 
plant, but experience proves that the benefit association occu¬ 
pies a prominent place in the worker's mind and to that extent 
exerts a stabilizing effect upon labor turnover. 

In estimating the broad results of mutual benefit associations 
and the practical significance of specific features of their or¬ 
ganization which may influence their success, the human factor 
stands forth as the most important. The experience of the 
organizations covered in this investigation emphasizes again 
what has been indicated in the Conference Board's previous 
studies of movements and devices for industrial betterment, 
that the mutual benefit association, like all forms of human 
association in industry, is not only a mechanism but a living 
organism. As a mechanism its operation is subject to certain 
definite laws, but as an organization, its success depends upon 
the extent to which it grows and adapts itself, under intelligent 
guidance, to the peculiar human needs which it must satisfy. 


14 


II 


PURPOSES OF MUTUAL BENEFIT ASSOCIATIONS 

From the evidence which the Conference Board has obtained 
regarding the purpose of employee mutual benefit associations, 
it appears that the chief reason for their formation has been to 
provide some measure of protection against accident and illness. 
In many instances this motive has been associated with the 
desire to supplant the prevailing system of occasional and 
voluntary contribution of funds for disabled employees. Both 
employer and employees have found this method of providing 
for disabled workers unsatisfactory, because of the disagreeable 
flavor of charity and the casual, uncertain and unbusinesslike 
character of such relief, and because such contributions fre¬ 
quently fall inequitably on the workers in an establishment or 
fail to provide adequate relief for the needy workers. 

The history of what is perhaps one of the most successful 
associations in the country today illustrates this development. 
In 1889, before there were any workmen’s compensation laws, a 
middle western company was building a warehouse. One of the 
carpenters fell from the building as a result of his own careless¬ 
ness and, after lingering for two or three weeks, died, leaving his 
family destitute. At that time the company was a small and 
struggling concern which was having difficulty in meeting its 
payrolls and was not in a position to pay out money as a gratuity 
to the relatives of its employees. A collection was taken up 
among the workers, but the plant superintendent thought that 
this was an unsatisfactory way of handling such cases and sug¬ 
gested to some workers that there should be organized a relief 
association which could accumulate funds through the collection 
of weekly dues from the members to take care of cases of acci¬ 
dent, sickness and death where the company itself was not 
liable. It was in this way that the association was organized. 

As one of the company officials wrote, “in its organization 
there was no idea that the association might be of value to the 
company. . . The sole idea was to make it possible for the em¬ 
ployee to give himself some measure of protection against acci¬ 
dent and illness, and also to prevent the continuation of a prac- 

15 


tice which was then current of sending a subscription paper 
around the shop whenever a distressing case arose.” 

Dissatisfaction with the method of “passing the hat” among 
employees for the aid of a disabled worker was the reason also 
given for organization of an employees’ mutual benefit associa¬ 
tion in an eastern plant: 

“It had been noted by those interested . . . that in the case 
of sickness or death of a worker, it was customary to take 
up a collection for the relief of the disabled person or of his 
immediate dependents. Usually the amount made avail¬ 
able by such collection was likely to be very uncertain, and 
would depend more upon the personality and popularity of 
the recipient of the relief than it would upon his actual need. 
Many other factors more or less uncertain entered into the 
matter, so that it was felt that some organized system should 
be devised by which all who might enter into such an Associ¬ 
ation should receive definite and specified relief, thus elimin¬ 
ating the idea of charity and putting the matter on a just 
and business-like basis.” 

A Massachusetts plant stated that the original reason for 
establishing its employees’ mutual benefit association was “to 
have employees not dependent upon charity when they were 
obliged to remain out because of illness, especially that particular 
class of employee that never saves any money, but spends it 
each week.” 

A Connecticut company stated that its purpose in entering 
into “the cooperative undertaking” was 

“to provide its employees with a certain income when sick 
or when disabled by accident, other than accidents received 
in the course of employment; to provide for families or bene¬ 
ficiaries of members a definite sum in the event of death of 
the wage earner and to maintain a fund to aid in the sup¬ 
port of members in their old age and in certain contingencies 
of family life.” 

A few employers regarded employee mutual benefit associa¬ 
tions as one means of dissuading workers from joining trade 
unions. It was one company’s belief that the employer should 
assist in financing the benefit association to the extent that the 
worker might obtain benefits at a smaller cost than would be 
procurable from a trade union. Another employer reported 
that the mutual benefit association had “taken the {lace of 
the trade union” among certain of his employees. This attitude 
toward associations was not common. 

The vice-president of an Iowa company wrote that in organiz¬ 
ing the employee mutual benefit association “we had no partic- 

16 


ular idea in mind as to how the association might be of value to 
us as an employer.” The company wanted the employees to be 
relieved from the worry and expense due to illness and absence 
from work and it was believed that the mutual benefit associa¬ 
tion would be the means of securing a maximum of benefit for 
a minimum of expense. 

These quotations represent broadly the attitude taken by the 
vast majority of employers covered in this investigation upon 
the question of the formation of employee mutual benefit asso¬ 
ciations. In most instances employers have encouraged and 
assisted employees in organizing and maintaining such associa¬ 
tions, not with the object of reducing labor turnover, improving 
productive efficiency or obtaining a more loyal group of workers, 
but in order that some protection might be afforded employees 
against privations resulting from sickness, accident and at 
death and that such protection might be on a systematic and 
equitable basis. As is pointed out later 1 the criterion by which 
the success of an association is measured by most employers is 
not its effect upon absenteeism, efficiency, labor turnover, and 
production, but whether the majority of the employees have 
joined it and whether it has been able to pay benefits when due. 
Such results as have been noted upon efficiency and labor turn¬ 
over have been considered as of secondary importance in estimat¬ 
ing the success of the association, although in many cases they 
are marked and highly valued. 

^ee p. 136. 


17 


Ill 


ORGANIZATION AND OPERATION 

Compulsory vs. Voluntary Membership 

Of 382 mutual benefit associations studied by the Board, 346 
maintain voluntary membership and 36 compulsory member¬ 
ship. 

In this connection it is important to bear in mind that several 
states have laws which directly or indirectly prohibit compelling 
an employee to join an association. For instance, a law of the 
State of Michigan covering this point reads as follows: 1 

“It shall be unlawful for any employer of labor, by him¬ 
self, his agent, clerk or servant to require any employee or 
person seeking employment, as a condition of such employ¬ 
ment, or continuance therein, to make and enter into any 
contract, oral or written, whereby such employee or appli¬ 
cant for employment shall agree to contribute directly or 
indirectly to any fund for charitable, social or beneficial pur¬ 
pose or purposes.” 

And further, 

“it shall be unlawful for any such employer, by himself, his 
agent, clerk or servant, to deduct from the wages of any 
employee, directly or indirectly, any part thereof without the 
full and free consent of such employee, obtained without 
intimidation or fear of discharge for refusal to permit such 
deduction.” 

Other states which have laws covering compulsory deduction 
of dues from an employee’s pay are New York, New Jersey, Con¬ 
necticut, Ohio and Oregon. Some of these laws are general in 
application, referring to “employers of labor,” “corporations” 
or “industrial establishments.” Others are specific and apply to 
“mercantile establishments,” “railroads” or other special 
industries. 

Advantages of Compulsory Membership 

Compulsory membership is favored by the associations that 
operate on this plan on the ground that it makes for greater 
stability of funds; that it provides benefits for those who es¬ 
pecially need them but who would not join voluntarily; that 

Compiled Laws of Michigan, 1897, Secs. 11400, 11401. 

18 


administration is more economical; and that membership cam¬ 
paigns and personal solicitations are thereby eliminated. 

There are always a certain number of employees who will 
not join an association voluntarily. They are either suspicious 
of the general plan or idea of benefits, or they comfort themselves 
with the assurance that they have not been sick or injured and 
that there is little likelihood of their needing the protection 
provided by the association. There is the class, also, who have 
membership in outside fraternal orders which pay benefits in 
varying amounts. This class is especially numerous among the 
foreign population. Some employers feel that these men will 
become members of the mutual benefit association only under 
compulsion. 

There is a well-defined feeling on the part of some who would 
welcome compulsory membership and yet recognize its objec¬ 
tions, that if the advantages of the mutual benefit association 
are presented in the proper light and the reasons why compulsory 
membership is more desirable than voluntary membership are 
carefully explained, there will usually be little or no antagonism 
toward such a measure on the part of employees. 

A mid-western company states: 

“Compulsory membership has features which on the face 
of it might become the means of causing an ill feeling among 
the men toward the management, as the average factory 
man does not relish the idea of being forced to do anything. 

We experienced in the early days of our organization con¬ 
siderable of this attitude, but at the present time we are very 
pleased to say that very little of this feeling exists.” 

Membership in the association in an Indiana machine com¬ 
pany was at first voluntary but was later made compulsory. 
A company official wrote regarding this change: 

“Our experience would lead us to favor compulsory mem¬ 
bership. We had years ago a similar organization made up 
of volunteer membership. . . . The older and less healthy 
employees retained membership, while the younger and 
active element would have nothing to do with it. The result 
was that the dues would not support the claims that fol¬ 
lowed and extra assessments had to be made, and the organi¬ 
zation in general got into a very bad state.” 

A noteworthy feature of this statement is that lack of interest 
on the part of the younger employees resulted in the association 
being unable to pay its benefits. If an association is chiefly 
composed of elderly members, a considerable proportion of whom 

19 


are likely to be drawing benefits continuously, the result is 
likely to be that expenditures will exceed receipts. That the 
remedy is to be found in compulsory membership does not 
necessarily follow. Compulsory membership is frequently taken 
as the easiest way out of the difficulty, but it may be a con¬ 
fession of inability on the part of the management of the con¬ 
cern and of the officers of the association to develop a plan that 
will be taken up by the employees on its merits. 

Of interest is the testimony of a Pittsburgh association, 
which has had experience with both voluntary and compulsory 
membership: 

“At first membership was voluntary, but this was later 
changed and it was made compulsory. We felt that in this 
way the burden was equally borne by every one and in like 
manner the benefits are the same to all.” 

A large Connecticut silk company reports that it follows a 
middle course, “with considerable success:” 

“In Connecticut compulsion is prohibited, but we enroll 
as members all eligible new employees, granting them, how¬ 
ever, the liberty of withdrawing. There are many who thus 
continue as members who would not have joined of their 
own motion; but there is still no compulsion.” 

Disadvantages of Compulsory Membership 

On the other hand, compulsory membership is regarded by 
some employers as contrary to the best interests of an associa¬ 
tion, in that compulsion in any form is usually distasteful to 
employees; that it fosters ill feeling and the idea that the em¬ 
ployer is endeavoring in some way to profit at the employee’s 
expense; that the employee feels the employer is taking ad¬ 
vantage of his desire to secure a job by forcing him to contribute 
to the association; and that his personal liberties are being in¬ 
fringed by enforced membership. In other words, it is felt in 
some cases that the psychological effect of compulsory member¬ 
ship is unsatisfactory. As one writer has expressed it: 

“In addition to the unsatisfactory psychological effect, 
this method is like catching fish by dynamiting the river. 

It seems much more business-like to provide insurance that 
embraces those features which make it worth while and then 
proceed to sell it on its merits .” 1 

An automobile company in New York State expressed the 
following opinion on this matter: 

*W. L. Chandler, “The Employees’ Benefit Association,” Industrial Manage¬ 
ment , New York, January, 1918, p. 37. 

20 


“We believe that the question of membership should be 
voluntary. This belief is based entirely on the success of our 
society in following this plan. The matter then becomes a 
purely sales proposition and cannot be construed as a 
‘hold up.’” 

A Chicago firm states: 

“Compulsory membership could hardly be kept free from 
the suspicion of ulterior motives on the part of the firm, in 
the eyes of the employees.” 

A publishing house in central Pennsylvania says: 

“We favor voluntary over compulsory membership be¬ 
cause in our opinion the idea of compulsory membership 
would lead employees to feel that there was ‘a nigger in the 
woodpile.’ ” 

A manufacturer of steel products, wrote: 

“I believe in voluntary membership for the reason that 
every one, irrespective of his station in life, resents compul¬ 
sion or dictation.” 

Some employers feel that compulsory membership takes all 
the spirit of honor or enthusiasm out of joining the association 
and dampens the feeling of loyalty and confidence which the 
association should help engender between employees and be¬ 
tween employer and employee. When employees belong be¬ 
cause they must, their sole purpose appears to be to get all they 
can out of the organization, and their interest and pride in the 
association’s success is likely to be negligible. It has been found, 
also, that “compulsory membership frequently has resulted in 
placing a board of directors and a secretary in office who gradu¬ 
ally drift to the attitude of autocracy, and enthusiasm, if it ever 
existed, soon vanished under such circumstances.” 1 

Undoubtedly there are advantages to both forms of member¬ 
ship. For the most part, however, the testimony of employers 
seems to favor voluntary membership. While compulsory 
membership may make for greater stability of funds, this sta¬ 
bility may be secured at the price of other things which are vital 
to the existence of a live association. An employee who joins 
an association under compulsion is likely to have no vital in¬ 
terest in its welfare and to lack that enthusiasm which makes 
for real success. He may feel no honor in joining and his only 
thought concerning the association is to get all he can from it. 
Even though the association may be nominally administered 
by employees, the compulsory membership may take away 
2 W. L. Chandler, op. cit ., p. 38. 


21 


from it the spirit of fraternity and cooperation which is more 
noticeable in the voluntary than in the compulsory society. 

Compulsory membership, also, tends to create a feeling of 
suspicion and distrust on the part of the employee against the 
employer. He resents the abridgment of his liberty involved 
in compulsory membership and immediately attributes it to 
some hidden motive on the part of his employer. 

It is true, of course, that under compulsory membership those 
types of individuals who need benefits but who would not other¬ 
wise join the association are covered. It seems safe to say, 
however, that under a voluntary plan which has been thoroughly 
explained to the employees, many of this type could be induced 
to become members. In any case, whether such individuals 
would or would not join under a plan of voluntary membership, 
is hardly a conclusive argument in favor of compulsion. 

In its investigations the Board has found that employees are, 
for the most part, decidedly opposed to compulsory membership 
just as they are opposed to compulsion in any other phase of 
their relation to their employer. It is significant also that out 
of 382 employers with whom the Board corresponded, 346 
reported voluntary membership, and a large number of these 
expressed themselves more or less emphatically as against 
compulsory membership. 

Membership Restrictions 

Regulations restricting membership are to be found in almost 
all the benefit plans studied. The kind and degree of restriction 
vary with individual cases. Some associations are considerably 
more liberal than others in their restrictions or in the interpre¬ 
tation of restrictions, and modifications are made in special 
cases. 

The more common membership restrictions are based on 
earnings; age; physical condition, as disclosed either through an 
applicant’s own statement, or through a physical examination; 
sex; period or length of employment; habits; race; degree of 
employment hazard; marital status; and place of residence. 

Restriction on Basis oj Earnings 

Where eligibility is on the basis of earnings, the regulations 
usually provide that no person whose wage is below a minimum 
amount per week may join. A special instance of such a 
restriction is that of an association which stipulates that a 

22 


minor must be earning at least $1 a day and that he must have 
his parent’s consent before he can join the society. Another 
form of wage restriction excludes salaried employees from 
membership. 

None of the associations which exclude persons from member¬ 
ship on account of earnings give an explanation for this measure. 
One or both of two considerations, however, may govern these 
associations in adopting this restriction. In the first place, there 
may be a feeling that if a man’s wage is below a certain figure he 
will not be able to pay the dues. The second and more plausible 
reason may be that if a man’s wages are below a certain level, 
the benefits he could draw from the society would be greater 
than his wage. This might be a temptation either to feign 
disability or to malinger when he was disabled. 

Several societies have a provision in their by-laws permitting 
those whose wage is below a certain level to take out “half- 
membership;” in other words such employees pay one-half 
the rate of dues paid by full members, and receive one-half as 
much in benefits. In some associations salaried members do 
not receive weekly benefits while they are drawing money from 
the company. 

Restriction on Basis of Age 

A large number of associations have an age restriction. Usually 
both a minimum and a maximum age are mentioned, although 
in some cases only one or the other appears. The setting of a 
maximum age limit avoids taking in as members men or women, 
who, by reason of the infirmities of age, might draw from the 
society more than they would put into it. Where employees 
are permitted to join an association regardless of their age, the 
benefits they may draw are frequently limited. Benefits may 
be arranged on a sliding scale, according to which a reduction 
in amount is made for each five or ten year increase in age. 
This sliding scale frequently applies to anyone aged forty-five or 
older at the time of joining. In one association, members be¬ 
tween forty-five and fifty are assessed 1 times, those between 
fifty and fifty-five, 1 4/5 times, and those between fifty-five 
and sixty, 2 3/10 times, the regular dues. Another association 
has incorporated in its constitution a provision that no employee 
thirty-five years of age or older who has been with the company 
ten years shall be eligible for membership. 

23 


Experience indicates that some restriction should be placed 
on those who join an organization after the age of forty-five. 
There is of course a moral distinction between the member who 
enters employment at the age of forty-five and the member who 
has been in service previous to reaching that age and who joins 
only when he begins to realize that he may need assistance. 
An employee who has joined the association early, contributing 
his share to the relief of other members, is entitled to greater 
consideration than the one who waits until he is forty-five to 
join. The plan followed by some societies, of varying the dues 
according to the age at which a man joins, is intended to cover 
the employee who does not join until he is of middle age. 

Experience, however, does not indicate that any difficulty 
should be placed in the way of the younger employees joining 
an association if they can pay the dues. They are likely to draw 
out in benefits less than any other class of members, and it is 
essential that an association have within its membership a large 
number of the younger and healthier workers to counterbalance 
the older members who are much more likely to be on the 
disability list. 

Restriction on Basis of Sex 

Comparatively few associations differentiate in their con¬ 
stitutions between men and women. In only five of the asso¬ 
ciations included in this study are married women excluded 
from membership. One association requires a waiver covering 
accouchement. Another requires a report of examination by a 
physician from all women who apply for membership. Eleven 
associations restrict their membership to males. One associa¬ 
tion specifically states that both males and females are eligible 
for membership. In the rest of the associations studied no 
reference whatever is made to sex as a membership requirement, 
the inference being that both sexes are eligible. 

Officials of some associations are of the opinion that it is 
more difficult to administer sick benefits where women are 
concerned. Whether or not this is justified is open to question. 
In view of the fact that so many concerns make no distinction 
with regard to sex, it would seem that the admission of women 
to membership has not proved difficult in the majority of cases. 
If women are objected to on the ground that they are subject 
to more frequent illness and to disabilities peculiar to their sex, 

24 


this objection may be largely overcome by the waiting period 
of two or three days to two weeks imposed by most societies. 
A waiver covering disabilities peculiar to women, such as re¬ 
quired by one association mentioned above, is another method 
of meeting this difficulty. 

Restriction on Basis of Period of Employment 

Membership in mutual benefit associations is frequently 
contingent upon the fulfillment of a certain period of employ¬ 
ment. This period varies from one day to a year. Of 210 
associations which submitted information on this point, those in 
which no employment period was required for membership 
numbered 109. An employment period of thirty days was 
required by thirty-nine associations; of ninety days by twenty- 
four associations; of sixty days by eleven associations; of seven 
days by eight associations; of fourteen days by six associations; 
of six months by five associations; of four months by two asso¬ 
ciations; and of one day, ten days, six weeks, eight weeks, 
twelve weeks and one year by one association each. The most 
common probation period is thirty days or one month. 

It is questionable whether the association gains anything by 
such a requirement. If an applicant is required to pass a physi¬ 
cal examination, the chances of his being a poor risk are reduced 
and the waiting period can add little to certainty on this point. 
It is hardly possible to determine definitely whether or not a 
man is a good moral risk, except in a general way, until he has 
belonged to the association for a time. The checks ordinarily 
placed by an association would seem to take care of any moral 
risk assumed when a new employee is received into membership. 

It is possible that a short waiting period may have a good 
psychological effect in increasing an employee’s interest in the 
association and his respect for its standards, but it may create a 
serious obstacle to full enrollment. 

Restriction on Basis of Physical Condition 

Physical condition, as measured either by the applicant’s own 
statement or by a physical examination, has assumed importance 
in many associations as a membership restriction. Of the 
associations studied, fifty-eight require merely a statement on 
the part of the applicant that he is in good health and eighty-six 
require a physical examination either by an applicant’s own 
physician, a physician designated by the association, or the 

25 


regular association physician. Some firms require all employees 
to undergo a physical examination at the time of employment. 
In a few of these same companies, association membership re¬ 
quires also an examination by the association physician. 

A physical examination serves as a check against the inroads 
on association funds through chronic or contagious diseases and, 
in conjunction with prophylactic medical service, may do much 
to lower the disability rate. For financial reasons and in order 
to protect the solvency of the fund, therefore, an examination 
seems to be desirable. It has the unfortunate consequence, 
however, of debarring from membership some who need benefits 
most. Part of this disadvantage may be overcome by admitting 
those who have certain chronic diseases or ailments under a 
special rate of dues and benefits, or under a waiver absolving 
the association from benefits for disability caused by those 
particular ailments, and by assisting such cases in various ways 
to improved health. 1 

Miscellaneous Restrictions 

Practically all of the associations studied by the Conference 
Board exclude from membership those of immoral habits. This 
rule, if fairly administered, is undoubtedly an excellent one, 
since it debars those who might in the natural course draw fre¬ 
quently or continuously on association funds. Such a rule, also, 
puts the association on a higher plane and adds dignity to 
membership therein. 

Only a few societies prohibit membership on account of race. 
Such restrictions usually apply to negroes. Thirteen constitu¬ 
tions examined by the Conference Board contained provisions 
excluding all but “white, male employees” from membership. 
The basis of this exclusion appears to be a fear that the health 
standards of negroes are lower than those of the white race and 
that they are, therefore, more susceptible to ill health. 

A few associations exclude from membership employees whose 
occupation is specially hazardous; and some require that a 
member live within a certain number of miles radius, in the 
county, or within the distance covered by a trolley fare. 

A number of minor membership restrictions not already men¬ 
tioned are sometimes found in mutual benefit associations. A 
study of 461 mutual benefit associations or funds, made by the 

*See p. 117. 


26 


Department of Labor 1 in 1908, showed the following kinds of 
membership restrictions: 

"‘Nearly three-fourths of the funds exclude no employees 
of the establishment from membership, but the remaining 
funds exclude certain employees, as follows: Females are 
excluded by 54 funds, including four which exclude married 
women only; colored persons by 37; those not working in 
certain specified departments of the establishments by 18; 
those earning less than certain specified amounts by 15; 
those employed in certain specified occupations, usually the 
more hazardous ones, by 14; officers, superintendents, foremen, 
salaried men and office force by 9; those not living within 
certain specified limits by 3; those not citizens of the United 
States by 2; those not belonging to any labor union by one; 
those of certain specified nationalities by one; boys whose 
fathers are members by one; apprentices by one.” 

The mutual benefit association originated as a means of pro¬ 
tecting as many as possible of the employees of a company and 
their dependents against sickness or disability, in some more 
systematic and just way than through occasional charity. 
Whatever can be done, therefore, to lessen the restrictions under 
which membership may be acquired, obviously comes nearest to 
meeting the standard of the mutual benefit idea as originally 
conceived. While it is impossible to admit to full membership 
in the society those who, for physical or other reasons, constitute 
a more hazardous risk than the average, practically all such 
special cases could be covered by providing various classes of 
memberships with rates based on relative risk, or by requiring 
a waiver of those afflicted with certain chronic ailments. This 
plan is followed by a number of associations. 

Application for Membership 

A number of mutual benefit societies treat an application for 
membership as a matter of considerable importance. The pro¬ 
spective member is required to make formal application in writ¬ 
ing to the proper official of the organization. In some cases the 
application must be formally presented to the executive or 
governing board or to the entire membership in a regular meet¬ 
ing for consideration and vote. Often it is necessary that the 
applicant be vouched for by one or more members of the 
association. 

In case the application is approved, the candidate is notified 
and a membership card or certificate is sent him as an evidence 

United States, Commissioner of Labor, Twenty-third Annual Report, 
Washington, 1908, p. 396. 


27 


of his membership, together with a copy of the constitution and 
by-laws of the association. As a preliminary step some asso¬ 
ciations have adopted the plan of sending the new employee a 
letter calling attention to the association and soliciting his 
membership. This is explained and illustrations presented in 
a later section of this report. 1 

Where an initiation fee is charged, this is sometimes collected 
when the application blank is signed. Otherwise the initiation 
fee is collected before the applicant receives his membership 
card or certificate. 

If a physical examination is required by the association, this 
must result favorably before admission to membership is com¬ 
pleted. 

Application forms differ. In general, however, they present 
the applicant’s request for membership; his consent to collection 
of dues by the paymaster, if dues are collected that way; desig¬ 
nate dependents of applicant for whose death benefits would be 
claimed, if such benefits are allowed; certify that applicant is 
temperate in habits and free from chronic or contagious disease. 
Usually provision is made for the signature of the applicant and 
for approval of the application by one or more officers of the 
association. 

Not all of the points mentioned are included in every applica¬ 
tion form. Some are quite brief and merely declare the em¬ 
ployee’s desire to join, and request action on the application. 

Apparently the fulfillment of certain formalities on the part 
of an applicant for membership to a benefit association is to be 
recommended up to a reasonable point. Such formalities have 
been found to add a dignity to membership in the association, 
give to the applicant the feeling that it is an honor to be elected 
to membership, and also that the organization is conducted on 
a systematic, discriminating basis and not in an indifferent, 
slipshod fashion. 

Effect of Termination of Employment 
on Membership 

The effect on membership of termination of employment 
varies considerably in different associations. In some cases 
termination of employment, regardless of the cause, automati¬ 
cally terminates membership in the association. Some associa¬ 
tions permit retention of membership without any qualifications 
J See p. 40. 


28 


or restriction. In other cases membership may be retained for a 
specified length of time under certain conditions. In still others, 
membership may be retained with respect to certain benefits 
but not with respect to others. 

The relation of termination of employment to membership 
raises three types of questions, viz.: the effect on membership 
(a) of temporary lay-off, due to lack of work; (b) of discharge 
or voluntary termination; (c) of forced termination of employ¬ 
ment due to disability. 

Temporary Lay-off 

The associations which provide for temporary lay-off of mem¬ 
bers due to slack work or industrial depression usually stipulate 
a definite period during which membership may be retained 
under such conditions. This period varies, in general, from 
ten days to one year. However, the length of time is sometimes 
not stipulated but is left to the judgment of the governing 
body of the association. 

Some associations permit the retention of membership under 
temporary lay-off up to a specified period, without the payment 
of dues. At the end of that period, say thirty days, an extension 
of time may be granted on request and by action of the board of 
directors, executive committee or similar body. One association 
follows the plan of issuing a reserve card good for twelve months. 
The holder of such card is exempt from dues, and receives no 
benefits during his lay-off, but may be reinstated without penal¬ 
ties, upon re-employment. 

A Connecticut fund permits a member, on the approval of 
the establishment, to accept employment with another firm for a 
period not to exceed four months, during two of which he is 
entitled to all the benefits of the society. For the remaining 
two months he shall not be entitled to any benefits or privileges, 
but on re-employment in the old firm such benefits are open to 
him again. 

Most of the associations which permit retention of member¬ 
ship when a plant is temporarily closed down require the pay¬ 
ment of dues during the period. A modification of this general 
policy is the regulation which permits an employee to retain 
membership and draw benefits without paying dues, for a 
specified length of time, but requires him, as soon as he is re¬ 
instated, to pay double dues until his indebtedness is canceled. 

29 


Similarly, another association provides that employees who have 
been in service six months may be carried in good standing with¬ 
out assessments for sixty days. If they cannot obtain employ¬ 
ment in the company again within sixty days, the right to bene¬ 
fits lapses until employment is resumed. 

In only a few cases is a member penalized when he rejoins the 
association after being temporarily laid off. Under the rules of 
one association a member who returns to work may be reinstated 
on payment of all back dues, or he may join as a new member. 
Another association allows membership to be retained for two 
weeks in case of unemployment, after which it ceases; but if 
employment is resumed within three months the employee may 
be reinstated by the payment of 50% of the initiation fee. 

Several associations make special provisions covering tem¬ 
porary lay-off of employees who have been in service for a 
specified time. For instance, in one case membership is con¬ 
tinued for sixty days if the employee has been six months in 
service, further extension of time being dependent on special 
arrangements with the factory manager. A preceding para¬ 
graph cites another association which grants special privileges 
to those six months or more in the service of the establishment. 

An association which reorganizes each year and declares a 
pro rata dividend out of the funds in hand at the end of every 
twelve months provides that when members are out of employ¬ 
ment because of lack of work at the plant, an employee may 
share in this dividend for the current year, according to his 
period of membership for the year. During the time he is 
absent from the plant an employee pays no dues and receives 
no benefits, but if he returns within the current year he may 
become a member in good standing. 

Some associations prohibit those who retain membership 
when temporarily laid off from engaging in occupations of a 
hazardous nature. 

Voluntary Termination or Discharge 

In all but a few of the associations studied the conditions 
governing the status of members who voluntarily terminate 
their service with a company, and of those who are discharged, 
are practically identical. 

The discussion of voluntary termination or discharge divides 
itself into a consideration of (1) those plans under which mem- 

30 


bership ceases automatically upon termination of employment 
or at the time of discharge, and also those plans under which 
membership lapses within a certain definitely specified period; 
(2) those plans under which a retention of membership is based 
on length of membership or employment previous to termina¬ 
tion; (3) those plans under which membership is affected by 
residence within a certain locality, area or radius; (4) those 
plans under which members whose employment is terminated 
voluntarily or by discharge lose or retain certain privileges or 
benefits; (5) those plans which provide for membership on re¬ 
employment; and (6) those in which membership is uncondi¬ 
tionally retained after leaving the establishment. 

In some associations the regulations stipulate that an em¬ 
ployee’s membership ceases automatically when he leaves the 
establishment. Other associations, however, provide that mem¬ 
bership or benefits may be retained for a specified time. The 
time may be designated either in days, weeks, months or years 
or in the following manner: “the end of the current month,” 
“end of current year,” “one month from date of last receipt 
for dues,” “until next dividend date,” and “the expiration of 
the time covered by the last dues paid.” 

Conditional Retention of Membership 

In a number of associations the conditions under which mem¬ 
bership may be retained are based upon length of membership 
in the society or the term of service with the establishment. 
One association, for instance, stipulates that membership ceases 
with termination of employment, except that an employee who 
has been a member for five consecutive years preceding termina¬ 
tion of employment may make application in writing, and if his 
application is approved by a two-thirds vote of the board of 
directors and charter members, his membership shall continue. 
Another association which has discontinued the general practice 
of permitting those who leave the employ of the company to 
continue their membership, now extends this privilege only to 
such as may have served the company for twenty-five years or 
more. 

Residence within a certain locality, area or radius is essential 
to the continuance of membership in some associations after 
leaving the employ of the establishment. A Hartford, Connec¬ 
ticut, association provides that an employee leaving the service 

31 


of the company may retain his membership as long as he is 
employed in Hartford and resides within a radius of ten miles 
of the city. Under the provisions of another fund, a member 
may be continued in the society if he complies with the regula¬ 
tions and resides within a radius of seventy-five miles. Two 
other associations limit the residence radius to twenty to thirty 
miles respectively. Several funds limit the retention of mem¬ 
bership to those residing within the county in which the factory 
is located. One association fixes the residence limit as “within 
a five-cent carfare limit of the city.” 

Where membership is extended to those who have ceased to 
be employees of the establishment, it is usually on a compromise 
basis. This may take several forms. For example, certain bene¬ 
fits or privileges enjoyed by employee members are denied those 
who are not employees; or non-employee members are not per¬ 
mitted to hold office or to vote. Some associations require from 
an ex-employee extra dues up to double the amount of regular 
dues. In every case where membership is retainable after leav¬ 
ing the employ of the company, all dues and assessments must 
be paid. 

Refunds of Dues and Assessments 

Some associations refund to members leaving the establish¬ 
ment a part of the dues and assessments which they have paid 
and against which benefits have not been drawn. One associa¬ 
tion refunds to a discharged member all assessments for the 
half year preceding discharge. This association, however, makes 
no refund in the case of voluntary termination of employment. 
In another association, membership ceases at once on termina¬ 
tion of employment and all dues paid in advance are refunded. 
Two associations permit members leaving the company to share 
in the pro rata dividend at the end of the current year. 

In another association a member who leaves gets back 50% 
of the dues he has paid in or, if he has received any benefits, 
50% of dues paid in, less such benefits. If an employee leaves 
within thirty days of the time he was employed, one association 
provides for a refund of his initiation fee. One-half the initiation 
fee and any assessments paid in advance are refunded by a 
Massachusetts society. A Connecticut association returns to 
the member leaving the employ of the company 25% of the 
total amount he has paid in excess of the amount he has received 
in benefits. 


32 


A New York association shows a divergence from the general 
practice in this respect. It provides that a member may either 
retain membership upon termination of employment, or he 
may withdraw and receive from the association “a sum of 
money equal to one-quarter of the difference between the amount 
of money paid into the association by him and all disability 
benefits, if any, received by him.” 

Payment of Partial Benefits 

Several funds studied allow only partial benefits to those who 
leave the establishment. A New Jersey society provides that 
“any member of this Association leaving the employ of the 
company shall be insured for sickness only and in case of death 
resulting from sickness only.” Some associations allow benefits 
for accidents to former employees occurring during the per¬ 
formance of duty only. 

An eastern steel company’s mutual benefit association pro¬ 
vides that “members of five years’ standing leaving the employ 
of the company may retain their regular funeral benefits by 
continuing payments therefor at the rate of four cents per 
annum for each year of their age at the time of admission to 
membership for each $50 of death benefits retained.” 

A mid-western society allows continuation of membership 
upon termination of employment, in respect to death benefits. 
This privilege is extended only to those who have been three 
years in the company’s service, and members of the society for 
one year. Death benefits cost the ex-employee five cents a 
week for each $200 insurance retained. 

In other associations distinctions are also made in favor of 
charter members or members who have been in the association 
for periods ranging from three months to five years. Women 
who have left to be married are sometimes excluded from con¬ 
tinuing their membership. 

Effect of Re-employment 

The effect of re-employment on membership in an association, 
and the procedure necessary to rejoin upon re-employment, 
vary with different concerns. In some instances membership 
is automatically renewed by re-employment. This is inevitable 
in the case of associations having compulsory membership. 

Practices differ as to the payment of another initiation fee or 
a portion of it, the payment of back dues, and other formalities 

33 


required of the former member who desires to regain his member¬ 
ship. In one company membership is automatically renewed 
and no initiation fee is required. Another association provides 
that a former member may be reinstated upon application and 
approval and the payment of an admission fee of $1, provided 
he is not over fifty years of age. A New England association 
provides for the reinstatement of a former employee without the 
payment of any back dues or assessments. The by-laws of one 
society provide that any employee who has been a continuous 
member of the company for five years, leaves its employ and 
returns in sixty days may, on the approval of the executive 
committee and the payment of all back dues, be reinstated and 
counted as a member of five years’ standing. Another asso¬ 
ciation provides that if a former employee returns within sixty 
days his membership may be restored by the payment of in¬ 
tervening assessments. 

A few associations penalize former employees seeking re¬ 
instatement, by imposing a specified period before the expira¬ 
tion of which no benefits may be drawn. One society, for ex¬ 
ample, permits such an employee to be reinstated without any 
restriction except that he is not permitted to draw benefits for 
one month. A number also require specific approval of such an 
employee’s application by a majority of the governing board or 
society members before he can be readmitted. 

Unconditional Retention of Membership 
Very few associations permit non-employee members to 
retain membership on the same basis as members who are em¬ 
ployees. It is significant, also that a number of those associa¬ 
tions which originally allowed an ex-employee full membership 
privileges have abandoned this policy because of the belief that 
it is detrimental to the interests of the association. In this 
connection an Ohio company wrote: 

“Originally we allowed membership in the association as 
long as a member remained in the county in which our fac¬ 
tory is located. This has now been changed because we 
found that the outside membership grew larger and larger 
and became a larger influence in conducting the affairs of 
the association. Membership is now confined to those in 
the employ of the company.” 

This concern waives this restriction for those who have been 
with the company twenty-five years. 

34 


On the same point another middle western concern wrote: 

“Originally men were allowed to retain their membership 
with the association after leaving our employ. This has been 
changed so that a man’s membership with the association 
terminates when he leaves our employ. This change was 
made so the control of the association would always remain 

with the employees of the - company. During the 

time mentioned . . . most of the officers left and they tried to 
handle the association from the outside. The employees of 
course, objected and changed the constitution and by-laws 
at the next election.” 

Other associations which in the past have permitted ex-em¬ 
ployees to retain membership appear to be coming more and 
more to the opinion of the concerns quoted on this point. 

Effect of Termination Due to Disability 

The status of members who, by reason of disability, are forced 
to terminate their service with the establishment receives 
special attention on the part of some associations. The pro¬ 
visions made by a number of societies in this respect apply not 
only to a member’s status during the disability period and at 
its expiration, but also to the procedure necessary on the 
member’s part to regain membership upon re-employment. 

A Massachusetts association provides that when a member 
leaves the employ of the company while disabled through sick¬ 
ness or accident, he may receive sickness or disability benefits 
for two years, or his beneficiaries may receive death benefits, on 
the same basis as other members, provided the member has not, 
since leaving service, secured other remunerative employment. 

The regulations of one fund stipulate that membership ceases 
when, for four weeks following the beneficial period, a member 
has been unable to fill his position. In this connection also, a 
Massachusetts association provides that a member who on 
account of mental or physical disability is obliged to withdraw 
from the active employ of the company for an indefinite period, 
by giving notice within thirty days of such withdrawal to 
the secretary, may retain his membership in the association 
until such time as in the judgment of the Board of Supervisors he 
has sufficiently recovered so as to be able to follow his usual or 
some other remunerative employment. A Connecticut society 
provides that any member who shall have received the full 
amount of benefit in a year and who shall have been continu¬ 
ously unable to work on account of sickness for a period of one 

35 



year, shall be entitled to draw benefits again for a period of one 
year, up to the full amount. Upon receipt of the second full 
amount of benefits, such member shall forfeit his membership 
in the association. 

Several associations base their rules regarding disabled mem¬ 
bers largely on their length of service with the company or their 
period of membership in the society. One association stipulates 
that an employee who has been a member for five years and is 
compelled to leave the employ of the company on account of 
disability may, by paying death assessments, remain eligible 
for death benefits only. This provision holds good, however, 
only so long as such employees are not employed elsewhere. 

The association in a New England plant provides for the 
payment of annuities to members who are retired from active 
service in the company by reason of age or physical condition. 
The amount of the annuity is fixed at the time of retirement 
and is based upon actuarial computations adopted by the board 
of trustees. 

A Boston association provides that “a member who has not 
reported for duty at the factory for one year, by reason of sick¬ 
ness or disability, shall not be entitled to further benefits for 
sickness or disability, or subject to further assessments during 
the continuance of such absence, but death benefits shall be 
paid as hereinafter provided.” For such members the association 
provides a death benefit without assessment for one year, 
provided they have been members at least one year previous 
to the time of leaving the company’s employ. 

An eastern Pennsylvania establishment provides that mem¬ 
bers leaving the employ of the company while disabled shall 
be entitled to receive benefits for two annual beneficial periods, 
provided they have not in the meantime secured remunerative 
employment. During the same period beneficiaries of such a 
member are entitled to benefit in case of his death. 

A New England association provides that any member who 
is obliged to remain away from his work for two successive years 
on account of sickness or disability, will not, after the expiration 
of this period, be entitled to sick benefits, but by continued 
payment of dues will be entitled to death benefits. 

The few associations which in their application forms mention 
the question of reinstatement for a member who has terminated 
his employment because of disability, provide that if he returns 

36 


later, he may be reinstated without the enforcement of any 
penalty such as the payment of an entrance fee or back dues. 
Usually, however, it is provided that reinstatement in such 
cases must be subject to the approval of the governing body. 

So far as can be ascertained from the mutual benefit associa¬ 
tions studied, there are no provisions for medical examination 
of members who have been compelled to terminate employment 
because of disability and who are later readmitted to member¬ 
ship again upon recovery. 

Effect of Failure to Pay Dues 

Almost all of the associations having voluntary membership 
have incorporated in their constitutions or by-laws regulations 
covering members who become in arrears for dues and assess¬ 
ments. Where collection is made through the payroll, no mem¬ 
ber can fall in arrears, unless he is laid off through disability 
or the amount in his pay envelope is less than his dues. Where, 
however, dues are collected either by an officer of the society 
or are paid to the secretary or treasurer by each member in 
person, regulations are necessary to insure prompt payment. 

The association regulations which cover the question of 
arrears in dues and assessments give attention to (1) the maxi¬ 
mum period for which arrears are permitted, and the penalties 
applied; (2) the conditions under which those suspended or 
expelled for arrears may be reinstated; and (3) the period of 
waiting imposed upon those who are reinstated, before they may 
again become entitled to benefits. 

Time Limit for Arrears 

Those funds which name a minimum or maximum period for 
which arrears in dues or assessments are permitted to run, 
stipulate a definite number of days, weeks or months; a definite 
day or time in the month; or a certain number of payments. 
The range is from one to sixty days; from one to twenty-six 
weeks; and from one to six months. The “tenth day of the 
month,” the “last day of the month” and similar designations 
are made in some cases. One association studied stipulates that 
a member who passes three payment periods is in arrears. 

Penalties 

In the majority of associations the penalty for arrears up 
to a maximum period is merely suspension of either disability 

37 


or death benefits. Frequently notice of arrears is sent to 
the delinquent member and he is allowed anywhere from one 
week to six months to protect his membership by the payment 
of arrears. One association, for example, provides that a mem¬ 
ber is in arrears when he has failed to pay dues for thirteen 
weeks, at the end of which tifne he is not entitled to benefits. 
If he has not paid up arrears at the end of twenty-six weeks he 
is given a further four weeks’ notice. If at the end of that time 
the arrears are not paid he is suspended from membership. In 
another society no member six weeks in arrears may draw 
benefits. If he is still in arrears at the end of twelve weeks he 
is suspended. Similarly another organization suspends benefits 
to a member one month in arrears and suspends membership if 
he is still in arrears at the end of two months. Other associa¬ 
tions provide variations of this plan of dealing with members 
in arrears. As an example, one society provides the following 
sliding scale of arrears and penalties: A member one month in 
arrears may not draw benefits until one week after he has paid 
up in full. One week’s penalty is added for every additional 
week of arrears, until at the end of two months the member is 
suspended. 

An exception to such practices is provided by one association 
which for every week of arrears up to one month imposes a 
fine of ten cents. Some associations also do not provide for 
any probation period within which a member may protect his 
membership by the payment of arrears. In these funds a mem¬ 
ber who is in arrears for a stated period is automatically dropped, 
or suspended without further notice. 

Reinstatement 

Conditions governing the reinstatement of members who have 
been suspended or dropped for failure to pay dues or assessments 
vary. Some provide for reinstatement by the payment of dues 
owing at the time of suspension or those accruing during the 
period of suspension. In other cases an additional fine is 
exacted. For instance, one association fines such suspended 
member 25 cents; another exacts a fine of $1 if the member is 
three months in arrears. The same fund also requires for re¬ 
instatement the payment of all back dues and dues for one 
month in advance. Another requires the payment of an en¬ 
trance fee, all back dues and a fine of 80 cents. 


38 


A number of funds require the delinquent to enter as a new 
member, paying all fees and dues required of such. One society 
requires a member two months in arrears to pay up and then 
wait eight weeks before again becoming entitled to benefits. If 
he becomes six months in arrears he is suspended and is required 
to wait six months before he may be admitted again. By paying 
his arrears and, in addition, the regular initiation fee and pre¬ 
senting a certificate of good health from the association phy¬ 
sician, he may be admitted as a new member, provided his appli¬ 
cation is approved by a majority of the society members. 

In addition to the other penalties enumerated, some associa¬ 
tions require a delinquent member renewing his membership 
to wait a certain period before he again becomes entitled to 
benefits. In the plans studied this period ranges from two weeks 
to three months. 

Special approval or vote of the governing body or of the 
membership in general is a prerequisite for the renewal of mem¬ 
bership in a number of associations. 

To prevent members who become sick while in arrears from 
paying up arrears in order to receive benefits, a number of 
associations have incorporated special clauses in their constitu¬ 
tions prohibiting such action. 

Interesting Employees in the Association 

One of the best measures of success of a mutual benefit asso¬ 
ciation in which membership is voluntary is the percentage of 
eligible employees who are members. The Board’s study shows 
conclusively that in order to obtain a large percentage of em¬ 
ployees as members the association must recommend itself to the 
workers. In this it is comparable to a commercial insurance 
company in which the sales organization plays so important a 
part. 

The younger workers who are in good health and who are 
a good risk from the insurance standpoint do not give much 
thought to the possible effect sickness or accident may have upon 
their earning power. They have to be shown the necessity and 
value of securing protection for themselves in the case of dis¬ 
ability. On the other hand, both employees who are constitu¬ 
tionally susceptible to disease and those who are older or who 
have families to support appreciate the advantages of a benefit 
association and are usually quite willing to join it. The mem- 

39 


bership of an association must be so constituted, however, that 
the risk is well distributed. Unless there is an annual increment 
of the younger and healthier workers in an association, in a 
short time more money will be paid out in benefits than is being 
received in dues and assessments and the organization will 
become defunct. In view of this fact that in a purely voluntary 
organization the type of worker who is more desirable from the 
association standpoint is not prompted to become a member, 
it is essential that some means be adopted whereby the ad¬ 
vantages of the organization may be brought to the attention 
of such employees with the object of inducing them to join. 

Interest in the association may be aroused in a number of 
ways. In many instances the practice is followed of endeavoring 
to interest the employee in the association at the time he is 
employed. The success of this plan in getting members depends 
largely on the manner in which the new employee is approached. 
While the beginning of his employment is undoubtedly an 
opportune moment to interest the employee in the association, 
it may be done in such a way that he may not think it wise to 
refuse to join. If this is so, membership, while nominally vol¬ 
untary, is in reality compulsory. In several plants, instead of 
trying to persuade the prospective member to join when he is 
employed, a letter is sent to him inviting him to become a 
member and affording him certain inducements to do so. 
The following is a letter used in a middle western plant: 

“You are cordially invited to join the-Mutual Re¬ 

lief Association, managed by your fellow employees for their 
mutual benefit, as you will see from the enclosed copy of by¬ 
laws 

“It is taken for granted that you desire to avail yourself 
of the privileges of this organization. 

“If you join within 30 days you save $1.40, half of the 
membership fee, so for that reason I have filed with the 
Directors an application for membership for you. 

“In this way you get the full benefit of prompt action, and 
if this is not in accordance with your wishes, please let me 
know at once.” 

The significance of this method of approaching new employees 
lies in the fact that, unless the worker notifies the secretary to 
the contrary, he automatically becomes a member. It is easier 
for the prospective member to acquiesce than to refuse to join 
because in the latter case he is expected to notify the secretary 
either in writing or in person. The letter places the prospective 

40 



member in a position where the path of least resistance leads 
him to join the association. 

Although this method of presenting the association to new 
employees is one that may result in building up a large member¬ 
ship, it may, unless properly handled, produce a spirit of resent¬ 
ment among the workers, who may regard it as veiled compul¬ 
sion. If this should be the case the price paid for a large per¬ 
centage of members would be too high and some other method 
should be adopted. 

In another company the same type of letter, requiring written 
notice of refusal from the employee if he does not wish to join 
the association, reads: 

“You are hereby notified that from the date of your enter¬ 
ing the employment of- you have been enrolled as a 

statutory member of the Benefit Association of-, and 

are thereby eligible to any compensation provided by law. 

“You are hereby further notified that you are eligible for 
full... limited... membership in Class... of such Associ¬ 
ation, entitled to the benefits thereof and subject to the con¬ 
ditions of the Constitution and By-laws of the Association, 
a copy of which is enclosed herewith. 

“Unless written notice of your wish not to accept such 
membership is received before. . . you will be enrolled as a 
full... limited... member of Class..., dating from... a 
full certificate of full . .. limited . .. membership will be 
issued to you and a deduction of . . . cents per week will be 
made from your wages thereafter.” 

Special Methods in Use 

Solicitation of new employees by members, by foremen, or 
by officers of the association is the practice in many organiza¬ 
tions. Where the association has an energetic secretary who 
consistently keeps after prospective members and encourages 
members to do likewise, personal solicitation may bring good 
results. Experience seems to show, however, that special 
campaigns and methods are usually necessary to attain desirable 
results. 

Various special methods and plans are used to get new mem¬ 
bers. That of paying a commission to those who secure new 
members is followed in a few instances. Under this plan any 
member may collect a commission of a certain amount per head 
for each new member brought in or one member may be ap¬ 
pointed as the association’s salesman. An official of a Connec_ 
ticut company whose association follows the latter plan wrote. 

41 




“At first the organization depended entirely upon volun¬ 
tary applications solicited by members, but this did not work 
out. We then adopted the method of appointing one man 
in our organization to solicit applications from new em¬ 
ployees, paying him a commission of 50 cents on each appli¬ 
cation obtained. This practice brought immediate results 
and is followed now.” 

Special membership committees work out to advantage in 
some societies. A New York State machine company describes 
its membership committee plan as follows: 

“Each year at the annual meeting a membership Committee 
is appointed. We place some one from each department on this 
membership Committee and they make it a point to talk to 
each and every employee in their department and endeavor 
to get them to join the association. We invariably succeed 
in getting 98% of the employees.” 

Foremen and department heads do the bulk of the soliciting 
work in an eastern association. Of its plan an official says: 

“Our membership since the organization of the society 
has averaged around 90%. This high percentage has been 
made possible by the close attention and cooperation of the 
foremen and department heads. All foremen and department 
heads, on the first of each month are given a list of non¬ 
members, which lessens their work in locating the non¬ 
members in their department.” 

Where foremen or department heads are depended on for the 
membership campaigns, these campaigns sometimes take the 
form of a contest, with various departments pitted against each 
other. A spirit of friendly rivalry thus developed and kept 
alive through the posting from time to time of the records of 
each department in the contest, has proved a splendid incentive. 
In the same manner members may be organized into groups 
and a contest waged to see which group can secure the largest 
number of new members. Suitable prizes may be offered to the 
winning team or its members. Announcement of the standing 
of the various teams should be made from time to time. It 
has been found best that such contests should continue only 
during a limited period, in order that contestants may not lose 
interest. 

Lessening the dues of the members in a particular section of 
the plant when the association funds of that section reach a 
certain amount, or extending this plan to include the entire 
plant, is another device used to induce association members to 
bring in new recruits. Members thereby secure their insurance 

42 


sources for revenue is, as will be pointed out, fraught with 
at a low rate and naturally try to bring in as many new members 
as possible in order to bring down their own dues. 

Special leaflets, notices on bulletin boards and in the house 
organ, posters, and other printed media are used to keep the 
mutual aid association before the employees. “We are con¬ 
tinually advertising the Mutual Benefit Association in our 
Works News, on the backs of pay envelopes and by personal 
appeal,” wrote an Indiana firm. Some concerns insert in the 
pay envelopes at regular intervals small leaflets or bulletins 
explaining the organization in detail. 

Variations of these methods are, of course, used. Most of 
the special plans mentioned are supplemented by personal 
solicitation or contact. 

Bonus plans of various forms have proved effective in several 
establishments. One of these takes the form of an offer on the 
part of the employer to pay additional disability benefits as 
the percentage of membership increases. For instance, if the 
percentage of membership reaches 75% of the number eligible 
for membership, the company adds $1 a week to the disability 
benefit allowed by the society. If the percentage of membership 
reaches 90%, the company adds $2 a week to the benefit. 

The drawback to this plan is that it benefits only those who 
become disabled—a comparatively small percentage of the 
members. Naturally, therefore, under such a plan, those who 
enjoy normal health will not have much interest in working 
for increased membership. 

As an alternative to this plan, the employer in some cases 
contracts to pay a certain percentage of the dues of each member 
when the membership in a particular department or in the 
plant as a whole reaches a certain percentage of those eligible 
for membership. Under this plan the employer pays one cent 
a week of the dues of members when the membership reached 
75%, and two cents a week when the membership reached 
90%. If the plant as a whole is taken as the unit, there is the 
possibility that under this plan certain departments will work 
harder and contribute more proportionately than others. Ill 
feeling is thus apt to arise against the laggard departments. 
For this reason it has been found better to localize the plan, 
applying it to each department rather than to the plant as a unit. 

It may be objected that this plan entails considerable clerical 
labor in figuring weekly percentages. This difficulty may be 

43 


obviated either by using the membership at the end of each 
quarter as the basis for the next quarter, or by allowing each 
member a refund equal to the company’s contribution for the 
quarter. 

To overcome the possibility that the company’s contribution 
might become an “old story,” it is necessary to devise ways to 
make the payment of the bonus somewhat of an event. It has 
been suggested that a bonus of some percentage of the dues be 
paid once each month, quarter or half year, and that special 
announcement be made at the time of payment. Bulletin 
boards, special posters or the company house organ may be 
utilized for this purpose; or, if meetings of the society are held 
often enough, the bonus can be made the subject of special 
announcement therein. In any event, the company’s bonus 
payments should not be allowed to become commonplace or to 
go unnoticed, or they will lose their value. 

Commercial Reinsurance 

Which is the better plan for providing protection for em¬ 
ployees in the case of sickness, accidents and death, that of a 
mutual benefit association in which the risk is carried jointly by 
employer and employees, or a mu tual benefit association in 
which the employees pay part of the premium, but the risk is 
carried by a commercial insurance company on a group life and 
disability contract ? 

Distribution of the Risk 

The evidence suggests that it is questionable whether there 
is sufficient distribution of the risk, except in the larger plants, 
to enable a mutual benefit association which is not reinsured 
in a commercial insurance company to operate on a sound 
financial basis. In a small plant, the death or protracted illness 
of but a few members may place such a strain upon the treasury 
of the association that it may be forced to suspend payment 
of benefits or experience other financial difficulties. The 
schedule of benefits, if it is to be adequate, is so much out of 
proportion to the income that can be derived from reasonable 
dues and assessments of members that the association is apt 
at times to be in a perilous financial condition, and to fail the 
members when they most need its protection. While it is 
true that social or recreational activities provide a means of 
securing additional income, the policy of depending on such 

44 


sources for revenue is, as will be pointed out, fraught with 
danger to the association. If it is desired to organize a mutual 
benefit association which will be financed by employer and 
employees, experience shows it to be the better policy, except 
in the larger plants, that death benefits be provided through 
a group life contract with a commercial insurance company. 
The sick and disability benefits may be financed within the 
plant. In many instances, employers who provide life insur¬ 
ance for their employees have made this insurance dependent 
upon membership in the mutual benefit association. This plan, 
rather than the provision of life insurance for all employees, 
is favored on the theory that a man more appreciates a thing 
that he has helped to pay for than something that is given 
to him for nothing. On the other side, there has to be con¬ 
sidered the fact that such an arrangement does not provide 
protection for all the workers in the plant. 

In plants employing several thousand workers the risk is 
apparently sufficiently distributed to furnish a sound basis 
for the operation of mutual benefit associations which are not re¬ 
insured. In such associations the difference between the sched¬ 
ule of benefits and the assured income from the dues and assess¬ 
ments of members is generally not such as to imperil the finan¬ 
cial standing of the organizations. 

Irrespective of the size of the plant in which it functions, a 
mutual benefit association, to be solvent, must have a reserve 
fund of a sufficient amount to meet all benefit claims that may 
be made upon it. A great majority of mutual benefit associations 
which are not insured do not fulfill this requirement—an 
elementary principle of insurance. Insurance companies, on 
the other hand, are compelled by law to maintain reserves of 
sufficient amount to meet all possible claims. From this stand¬ 
point, therefore, the association in which payment of benefits 
is guaranteed by an insurance company offers a much greater 
degree of security or protection to its members than the asso¬ 
ciation which is not insured. 

Catastrophic Epidemic Hazard 

In the larger as well as the smaller plants there is always to be 
considered the catastrophic or epidemic hazard. A mutual bene¬ 
fit association reinsured in a commercial insurance company which 

45 


has its risks distributed over many plants in many localities is 
obviously in a much stronger position than an association in 
which risk is concentrated in a single plant employing one 
hundred or one thousand workers. Those benefit associations 
which are financed entirely by employer and employees, the 
membership of which is spread among several plants in different 
parts of the country, have their risk better distributed than 
associations whose membership is confined to one plant, but 
even these associations have not so wide a distribution of risk 
as a commercial insurance company with policies in effect from 
coast to coast. On the basis of safety, therefore, a mutual bene¬ 
fit association which is reinsured is to be preferred to one that 
is financed either within a single plant or a single company. 

Rate of Benefits 

While insurance companies will write a group disability con¬ 
tract paying as low as $5 a week disability benefits, the usual 
rate of benefits paid by associations which are reinsured is be¬ 
tween $10 and $12 a week. As the common rates of disability 
benefits in the associations studied in this investigation are $5 
and $6 a week, the group disability contract or a mutual benefit 
association reinsured by a commercial insurance company is 
preferable to the mutual benefit association financed within the 
plant, when considering the question of adequacy of disability 
benefits. Contributions of employers also are a factor in the 
rate of benefits which an association can pay. The lower rates 
of benefit are usually found in those associations which are 
financed entirely by the employees. 

The adequacy of death benefits must also be considered. 
Commercial insurance companies will not write a group life 
insurance contract that provides less than $250 insurance for 
each employee, and this must be increased to $500 at the end 
of one year. The predominant death benefit paid by the mutual 
benefit associations which are not reinsured is $100. The latter 
will no more than meet the ordinary expenses of burial, with 
little, if anything, left for a deceased member’s dependents. A 
consideration of the death benefits paid by the great majority 
of mutual benefit associations which are financed by employers 
and employees, and of the amount of insurance placed on em¬ 
ployees through a group life contract with an insurance com¬ 
pany, shows that the latter plan provides a much more adequate 

46 


sum for the employee’s dependents at the time of his death than 
the former. It has the further advantage that the employee 
may convert his group life policy into any one of the ordinary 
forms of insurance when he leaves the employ of the company. 

The disability and death benefits provided by a number of 
the mutual benefit associations covered in this study compare 
quite favorably, however, with the insurance provided by com¬ 
mercial companies through group life and disability contracts. 
In these cases, the employer contributes to the funds of the 
association, thereby enabling the members to secure benefits 
that are adequate both during time of sickness or accident and 
at the time of death. This goes to show that inadequate benefits 
are not an inherent or irremediable defect in a mutual benefit 
association. A few of the associations which are not insured 
provide disability benefits of as high as 75% of weekly wages; 
in one association the members receive their weekly wages in 
full for ten weeks in a year, half of the benefits being paid by 
the association and half by the company. The great majority 
of associations which relate benefits to wages do not, however, 
pay more than 50% to 60% of the member’s weekly wages. 
Experience shows that to exceed 66 %% of weekly wages is 
liable to foster malingering. Where the disability benefit is 
more than two-thirds of the member’s weekly wages the strictest 
supervision must be exercised over all benefit claims. The 
experience of commercial insurance companies has led them 
to restrict accident and health benefits to two-thirds of the 
insured employee’s total weekly income from all sources. 

Some employers state that the mutual benefit association 
which is financed entirely by the employer and employees can 
count upon a greater degree of cooperation from its members 
in the reduction and elimination of malingering than the asso¬ 
ciation which is insured. This is on account of the financial 
interest that the members have in seeing that the funds of the 
association, which are made up in part of their own contribu¬ 
tions, be expended on genuine benefit claims only. There is a 
danger, however, that this desire to safeguard the treasury of 
the association may lead them to refuse or curtail benefits to 
members who may be actually entitled to them. In this way, 
the association may defeat its own end, which is to provide 
protection for its members. The association which insures the 
payment of benefits in an insurance company does not need to 

47 


examine benefit claims with an eye to the amount of money in 
the treasury available for benefits. At the same time, the 
members of an insured mutual benefit association are interested 
in the prevention of malingering, as they know that the amount 
of dividend returned to the association by the insurance carrier, 
if a mutual company, depends in part upon the morbidity ex¬ 
perience of the group. It is to their interest, therefore, to see 
that only members who are entitled to benefits receive them. 

Restrictions on Membership 

When a mutual benefit association insured on a contributory 
basis by a commercial carrier is organized in a plant, no restric¬ 
tions are placed upon membership. It isopen to all who, within 
a certain number of days, usually thirty, following the announce¬ 
ment of the plan, signify their intention of subscribing to it. 
Thereafter a probationary period of three months may be re¬ 
quired of new members. The mutual benefit association which 
is not insured, must, for its own protection, have certain re¬ 
strictions on membership, although at the time of the organiza¬ 
tion of such an association, all employees, irrespective of their 
age or physical condition, may be declared eligible for member¬ 
ship if they join within a certain time. The restrictions on 
membership in effect in most benefit associations which are not 
insured, act to exclude certain employees from the protection 
the associations afford. This is not the case with a contributory 
group disability contract with an insurance company. 

Restrictions on Benefits 

Similarly, most of the benefit associations studied have 
numerous restrictions regarding the payment of benefits which do 
not obtain in the benefit associations insured by commercial 
carriers. Benefit associations financed entirely by employer 
and employees do not, for instance, pay disability benefits for 
venereal disease or death benefits for suicide, while those asso¬ 
ciations insured by insurance companies usually pay benefits in 
such cases. These restrictions constitute a further limitation 
on the protection afforded employees in associations which are 
not insured. Another restriction of similar effect in most 
mutual benefit associations which are financed within a plant is 
that which requires a certain period of membership before a 
member is entitled to receive benefits. This is in contrast to 
contributory group disability contracts with an insurance com 

48 


pany in which benefits are usually paid irrespective of the length 
of time that the disabled employee has been insured. 

Percentage of Employees Covered 

As regards the percentage of employees who secure protection 
the mutual benefit association which is insured by an insurance 
company is to be preferred to the association which is self- 
contained. An insurance company will not write a contributory 
group disability contract unless 75% of the eligible workers are 
covered. In the associations studied in this investigation, the 
percentage of eligible employees who are members varies from 
7% to 99%. Undoubtedly the average is below 75%. On the 
other hand, certain mutual benefit associations which have a 
large percentage of eligible employees as members have been 
notably successful. This success has been largely due to an 
adequate scale of benefits and the use of effective sales methods 
in presenting the organizations to the employees. An equal 
degree of success can undoubtedly be achieved by every mutual 
benefit association, if benefits are adequate in amount and if 
the organization conducts aggressive membership campaigns. 

Cost 

Because of the many varying factors involved, it has been 
found impossible to make an accurate comparison of the cost 
of the insurance provided by commercial insurance companies 
with that provided by mutual benefit associations which are 
not insured. While plants employing several thousand workers 
may be able to organize and finance mutual benefit associations 
as cheaply or more cheaply than if the insurance were carried 
by a commercial carrier, it must be noted that the organization 
and administration of a mutual benefit association entails con¬ 
siderable time and labor on the part of the employer, if it is to 
be a success. At the same time also, the element of catastrophic 
or epidemic hazard has to be considered, and this is best pro¬ 
vided for, apparently, in the smaller plants through reinsurance 
for the payment of death benefits at least, if not disability 
benefits as well. 

State Supervision or Assistance 

The question as to whether associations for relief for employees 
and their families at the time of sickness, accident or death 
should be handled entirely by industry itself or whether the state 

49 


should aid and supervise this work cannot be determined at the 
present time because data regarding results of state supervision 
of mutual benefit associations are not obtainable in sufficient 
volume to enable a comparison to be made. Massachusetts is 
the only state which has experimented in this field. 

As the result of an investigation of the subject of non-contribu¬ 
tory health insurance and old age pensions by a special commis¬ 
sion authorized by the Massachusetts legislature in 1918, it was 
recommended that provision be made for “further encouraging 
and promoting the organization of mutual benefit associations 
among the employees in industrial plants in Massachusetts as is 
already carried on under the direction of the Massachusetts Sav¬ 
ings Bank Life Insurance.” 1 In the words of the Commission: 2 

“It is our opinion that an ultimate solution of the sickness 
indemnity question may be partially reached at least through 
the growth and development of voluntary industrial mutual 
benefit associations now in operation. ... It preserves to the 
individual his present freedom and exercise of resourcefulness, 
and makes it possible for him to insure voluntarily at a nom¬ 
inal fee.” 

Following the recommendation of the commission, the Savings 
Bank Life Insurance Division has assisted employers and employ¬ 
ees who desire to cooperate in a plan of life and disability insur¬ 
ance for employees. It confers with employers as to the type of 
benefit association which would be best for the employees and 
the amount of the company’s contribution to the fund. It advises 
the employees of the benefits to be derived from an association 
and assists them to perfect their organization, supplying 
application blanks, books of record and other forms needed. 

The weekly disability benefits in an association organized 
under this 'plan cannot exceed $15 per week. Benefits begin 
with the eighth day of disability and are payable for not more 
than ten weeks in any one year. The sickness benefits are paid 
direct from the association funds, whereas the life insurance is 
provided through the savings banks under a group policy issued 
to the employer. If the member leaves the employ of the com¬ 
pany he may convert his policy into any one of the forms of 
insurance issued by the savings banks, except term insurance, 
in an amount equal to the amount of his protection under the 
group policy at the time of the termination of his employment. 
Life insurance to the amount of $100 or over is issued. 

Massachusetts, Report of the Special Commission on Social Insurance, Bos¬ 
ton, 1918, p. 175. 

mid., p. 38. 


IV 


ADMINISTRATION 

Apart from the minor details, there is little variation among 
methods of administering mutual benefit associations. Mem¬ 
bership is in most instances confined to the employees within 
an individual concern and one group of officers conducts the 
business of the association. The size of a plant, however, may 
necessitate breaking the association up into more or less 
autonomous sections. 

Division of an Association into Sections 

In the case of an eastern concern which employs ten 
thousand workers, the association was originally operated as 
a single unit with one set of officers. It is at present divided 
into sections in each of which the membership is limited to 150. 
Male and female employees form separate sections. The asso¬ 
ciation has but one officer called the General Chairman, 
appointed by the company. His duties are to “look after the 
interests of the association in general” and to see that all 
transactions are carried out in accordance with the constitu¬ 
tion and by-laws. He calls special meetings of the association 
and presides at the same. 

Each section of the association has its own officers, con¬ 
sisting of a chairman, a vice-chairman and a secretary-treas¬ 
urer. These three officers, elected by the members of each 
section, together with six other members of a section, duly 
elected, constitute the board of directors for each section. 
A visiting committee is appointed by the chairman of each 
section to visit the disabled members of that section. 

There are no regular meetings of the association, but special 
meetings may be called either by the general chairman or at 
the written request of the boards of directors of three or more 
sections. Each section holds an annual meeting and the board 
of directors of each section meets monthly. 

Each section is run independently of the others, apart from 
a per capita contribution made by each section to an “Emer¬ 
gency and Death Benefit Fund” which is in charge of a com- 

51 


mittee composed of the chairman of each section, together with 
the general chairman as chairman of the committee. Death 
benefits are paid from this fund, but each section pays tempo¬ 
rary disability benefits to its members out of its own treasury. 
The Emergency Fund Committee may levy assessments upon 
all members of the association when, in its judgment, con¬ 
ditions warrant it. 

When the funds in the treasury of a section fall below $100 
the general chairman, after investigation, pays from the 
emergency fund to the account of such a section a sum equal 
to the difference between the amount in its treasury and $200. 

When the funds in the treasury of a section exceed $400 the 
surplus is paid into the emergency fund treasury. When the 
amount in the emergency fund treasury reaches $7,500, 
weekly dues are discontinued until the funds are reduced to 
$4,500, when the payment of weekly dues is resumed by the 
members of all sections. 

According to the company, by the division of the association 
into self-governing sections the members are brought into 
closer contact with the officers, the work of administration is 
divided among more employees and the inter-section rivalry 
that has developed has been of material value to the associa¬ 
tion. Competition is keen among the sections to secure as 
many of the eligible employees as members as is possible. No 
section wants to have to call upon the emergency fund treasury 
for assistance and each section endeavors to secure the dis¬ 
tinction of being the most efficiently run and the least costly 
to its members. The percentage of eligible employees in the 
plant who have been members during the period 1913 to 1921 
is as follows: 1913, 53.5%; 1914, 69.7%; 1915, 63.6%; 1916, 
57.8%; 1917, 61.7%; 1918, 68.7%; 1919, 69.7%; 1920, 73.9%; 
1921, 87%. 

Centralized Association for Several Plants 
of One Company 

When a company has several plants situated in different 
parts of the country it may be found desirable to organize one 
central benefit association rather than to form independent 
associations at each plant. 

A Massachusetts company has plants in New England, 
Kentucky and Minnesota. The employees’ mutual benefit 

52 


association in this company is directed from one of the New 
England plants and is under the immediate charge of the 
association manager who has supervision of “all business per¬ 
taining to the benefit association.” The members of the asso¬ 
ciation in each plant elect one of their number to represent 
them on an advisory committee which has general supervision 
of the operation of the association. The committee, composed 
of an equal number of representatives of the members and of 
the company, meets in Boston semi-annually and at other 
times on the call of the chairman. Dues are deducted through 
the medium of the payrolls at the various plants and are re¬ 
mitted at the end of each month to the office of the manager of 
the association. All applications for benefits must be approved 
by the manager before payment is made. It is stated that it 
takes not longer than five days for a claim for benefits to be 
forwarded, passed by the manager and check for payment to 
reach a member of the association in Kentucky. 

The manager of the association states: 

“We did not consider independent associations at each 
plant as a good proposition. Some of our branches are rather 
small, and a united association has a much better chance to 
grow stronger and succeed than several small ones. With 
one management, one set of rules and regulations, and proper 
representation on the Advisory Committee, we feel that our 
present system is much better.” 

At the time of this report 43% of the employees eligible for 
membership are members of the association. 

Officers 

The question of the selection of officers to run the affairs of 
a mutual benefit association should be given special considera¬ 
tion, since the failure of more than one association can be 
largely traced to the failure of its officers to live up to their 
responsibilities. Officers should be enthusiastic, able to inspire 
the members of the association to constant effort in behalf of 
the association, and, above all, they should be possessed of a 
keen business sense and the ability to handle the affairs of the 
association on business principles. Especially is this true of 
the association controlled or managed by employees alone. 

The qualifications entitling a member to hold office, the 
number of officers needed, the method of their selection, what 
duties they should perform, their period of service, whether 

53 


they should be bonded or not, whether they should receive 
remuneration or not, and whether or not the company should 
participate in the administration of a society to the extent of 
representation on its governing board, are all questions re¬ 
quiring early decision by those who organize a mutual benefit 
association. 

Eligibility 

Few of the associations included in this study give special 
attention to the question of the qualifications of officers. 

In a great many associations no mention is made of the 
qualifications which a member must possess in order to become 
an officer. Apparently it is understood in such cases that in 
order to hold office, membership and good standing in the 
organization are requisites. A survey of those associations 
which prescribe certain qualifications for the office holder 
shows that membership in the society, arrears in dues, termina¬ 
tion of employment, age and period of service with the estab¬ 
lishment, are factors which have a direct bearing on eligibility 
for office. 

A New York association provides that no one can hold office 
who is not a member in good standing. Arrears in dues dis¬ 
qualify for office. Termination of service with the establish¬ 
ment automatically disqualifies one from holding office. 
Several funds provide that no one who has not been a member 
for at least six months may hold office. Age restrictions are 
prescribed by several associations. Usually it is provided that 
no one under twenty-one years of age may hold office. Various 
periods of service with the establishment are necessary in 
different funds before one may be eligible for office. A com¬ 
mon period is one year, although in some cases it runs as high 
as five years. 

In one association the management of which is shared by 
the company and the employees, the governing board is com¬ 
posed of seven directors. Five of these are elected by members. 
These five must be members of the fund. Two, however, are 
appointed by the company. It is not necessary that the latter 
be members of the fund. 

Within reasonable limits, restrictions governing eligibility 
for office are apparently desirable as lending dignity to office. 

54 


Each association must determine, however, what form such 
restrictions should take in its own case. 

Number 

The number of officers varies according to the individual 
society. Commonly the officers consist of a president, vice- 
president, secretary and treasurer, with the further occasional 
addition of such officers as actuary, auditor, sergeant-at-arms, 
marshal, collector or collectors, stewards or other special 
officers. In addition to such officers, a large number of the 
associations studied have a governing board known variously 
as the board of trustees, board of directors, official board, or 
executive board or committee. 

The number of members on the governing board generally 
ranges from two to ten. This number may be increased when 
representation is by departments. In some cases the governing 
board is not a separate group but is composed of the officers 
of the society. In this form it is sometimes known as the execu¬ 
tive board or executive committee. Sometimes, however, the 
governing board consists of the officers of the association and 
additional members who are either elected or appointed. 

A few associations do not have a president or vice-president. 
It is customary in such cases to have either a recording secre¬ 
tary and a financial secretary; or a secretary and a treasurer; 
or these officers may be combined in a secretary-treasurer. 
Sometimes also the single officer of an association is known 
either as the secretary or the treasurer. 

In a few cases the mutual benefit association is simply an 
auxiliary of a works council or of an employees’ association 
which comprehends other activities besides the payment of 
benefits. In such cases the officers of the primary organization, 
whether it be a works council or an employees’ association, 
are usually the officers of the mutual benefit association also. 

In one benefit association whose affairs are managed as part 
of a works council, known as an advisory council, each depart¬ 
ment is represented by a committee of five, four of whom are 
elected by the advisory council annually. The fifth member of 
the committee is the advisory council member representing 
the department in question, who is chairman of the committee. 
This committee, known as the department executive com¬ 
mittee of the association, elects its own secretary. 

55 


Another association which is under the supervision of a 
works council has its own officers, whose duties are outlined 
by the representatives committee of the council, which is 
composed of members selected jointly by employer and 
employees. 

A New York fund which is conducted as a part of a general 
employees’ association has the same officers as the general 
association. The officers consist of a president, vice-president, 
secretary-treasurer and general counselor. The affairs of the 
association are managed by a council whose membership con¬ 
sists of one representative from each works department, one 
representative from the combined office and laboratory staff, 
and the officers of the association. 

Election 

The methods of electing or appointing officers differ widely. 
In a majority of associations the officers are elected by the 
members. In other associations, one or more officers are 
elected by the members and the others are selected by the 
governing board or by the company. In one association the 
regular officers are elected by the society. The president in 
turn selects seven members of the board of trustees, which is 
composed of the society officers and the seven members men¬ 
tioned. Two each of the seven members appointed by the 
president must be from the machine department, the struc¬ 
tural department and the foundry department, and one from 
the pattern department. 

In another association, according to its by-laws, the officers 
consist of “a president, a vice-president, a secretary, a treas¬ 
urer, a financial secretary and an executive board of seven 
persons, of whom one shall be the financial secretary of the 
association; two shall be appointed by the company; three 
shall be ex-officio the president, the treasurer and the secretary 
of the association, and the seventh shall be elected by these 
six.” It is also provided that the financial secretary is to be 
appointed by the company. The officers of a New England 
fund consist of a president, vice-president, secretary, treasurer 
and a board of seven directors. Six of these directors are 
elected by the members of the fund to represent various de¬ 
partments. The seventh director is appointed by the company 
to represent it. The president and secretary are elected by 

56 


fund members and the treasurer is the paymaster of the 
company. Vacancies in the board of directors are filled by 
special election. Vacancies in the offices of president or 
secretary are filled by the board of directors. 

In another society the president, vice-president and direc¬ 
tors are elected by popular vote, the secretary-treasurer is 
selected by the directors and an actuary is appointed by the 
company. The procedure in a New York fund consists of a 
popular election of the board of directors, who in turn choose 
all other officers with the exception of the secretary and treas¬ 
urer. The former is appointed by the establishment and the 
functions of the latter are vested in the establishment itself. 

In a number of instances the society members elect directors 
or trustees who from their own number select such officers as 
a president, vice-president, secretary or treasurer. According 
to the by-laws of one association, the executive officers of the 
association must consist of a president, vice-president, 
treasurer, secretary and assistant secretary and a board of 
directors. The directors are elected by ballot of the members 
prior to the annual meeting. The directors nominate and 
appoint the officers of the fund. It is stipulated in the by-laws 
that the secretary, treasurer and assistant secretary need not 
be members of the board, but that the president and vice- 
president must be board members. In a number of instances 
it is provided that the treasurer or paymaster of the establish¬ 
ment shall be the treasurer of the association. 

A Michigan aid society “is in the executive charge of a 
board of trustees, consisting of four members representing the 
employees . . . and one member representing the company/’ 
There are no other officers. The board of trustees elects its own 
chairman. The governing body of a Wisconsin association, 
which is conducted as part of an employees’ cooperative asso¬ 
ciation, is known as the joint council. This consists of eight 
members, four of whom are appointed by the shop committee 
of the association and four by the company. It elects its 
own officers, consisting of a president, vice-president, record¬ 
ing secretary, financial secretary and treasurer. 

In two funds studied, the company exercises entire control 
over the association and its funds. Membership is compulsory 
and the members have no representation. There are no 
officers, but the business of the organization is handled in one 

57 


case through the employment office of the company and in 
the other through the factory manager and timekeeper. 

An eastern Pennsylvania fund is under the supervision of 
the relief department of the company. The president of the 
company appoints a superintendent who, with the aid of such 
clerks and other assistants as he may need, carries on the 
business of the fund. An advisory committee of twenty-two 
members and a chairman are also provided for. The chairman 
of this committee is the president of the company. The other 
members are chosen annually, one-half being appointed by 
the president of the company and one-half elected by 
members of the association. Representation on the advisory 
committee is on the basis of membership in different depart¬ 
ments and plants of the company. The superintendent is ex- 
officio secretary of the advisory committee but is not a member 
thereof. 

In associations where management is shared by the com¬ 
pany, a common practice is to have an advisory committee, 
the chairman of which is a representative of the company. 
The association is also directly represented on this committee. 

It will be seen that the number of officers which an associa¬ 
tion may have, and the methods of electing or selecting these 
officers, differ to a great degree. The number of officers is not 
nearly so important as the type. An association need not have 
a full complement of officers, but in any case those who are 
elected or appointed to direct the affairs of the association 
should be men of integrity, sincerity and ability. 

Duties 

No less varied than the number of officers and the method of 
selecting them are the duties assigned to officers in the funds 
studied. These differ largely according to the number selected 
by the society. In general, however, their duties run along the 
same lines as those of similar officials in most organizations. 
The following special features may be noted: 

It is not unusual for an association to divide its secretarial 
work between a recording secretary and a financial secretary. 
One association following this plan assigns to the recording 
secretary the keeping of the minutes of the meetings; the con¬ 
ducting of all correspondence; the reading of all bills and 
communications; receiving applications for membership and 

58 


the drawing and signing of all orders passed by the society. 
The financial secretary of the same society is directed to 
“receive all fees, dues, and other moneys, and pay the same 
to the treasurer, taking his receipt therefor; keep a correct 
account between the association and its members, and make 
a report at each regular meeting” and to approve all sick and 
death claims. The treasurer of this society is directed to “hold 
all moneys and pay all orders properly drawn and sealed.” 

The division of the secretarial and financial departments of 
the association is in contrast to the practice in associations in 
which there is merely a secretary and treasurer, with the 
possible addition of a financial secretary, or where the duties 
of secretary and treasurer are vested in one officer, known as 
the secretary-treasurer. 

It is rather unusual for a fund to designate one man as its 
auditor. More often such activities as might be covered by an 
auditor are assigned to several individuals. A number of 
societies list among their officers a certain number of auditors, 
commonly three. In some associations the auditors taken as a 
whole are known as the auditing committee or auditing board. 

Very few societies have an actuary. One society studied, 
however, directs the actuary “to keep informed on all actuarial 
matters of interest to the association and exchange actuarial 
experience with similar officers of other associations for the 
general good of the association. He shall give advice to the 
directors of the association, covering such information as he 
may have or be able to secure, referring to any insurance or 
financial matters submitted to him.” This sums up in a general 
way the usual duties of an actuary. 

The duty of collectors is to collect dues and assessments 
from members of the association. In one association also they 
receive applications for membership and perform duties 
similar to those of a sick committee in other associations. 

One society has two stewards whose duties are to visit all 
sick and disabled members within forty-eight hours after 
notice, and continue to visit once a week thereafter during 
such sickness or disability. Their duties also include ascertain¬ 
ing from the financial secretary the standing of all members 
who apply for sick benefits, and the payment of benefits when 
due, for which a receipt is secured. They also are required to 
endorse and draw all orders upon the treasurer for sick and 

59 


funeral benefits; and sick members in their charge must be 
kept in good standing while drawing benefits. They ascertain 
that the physician attends promptly and faithfully to his 
duties and report to the president and association any dis¬ 
obedience to the physician’s prescribed orders by any members 
drawing sick benefits. 

The duties allotted to stewards in this case are rather 
remarkable when it is understood that the association has a 
full quota of officers including in addition to the stewards, a 
president, vice-president, treasurer, recording secretary, 
financial secretary, marshal, sergeant-at-arms and three 
trustees. 

Compensation 

Officers in some associations do not receive any compensation 
or salary in any form. In a few societies all officers are paid. 
In others one or more of the officers receive a salary. In such 
cases the secretary or treasurer or both are usually included 
among the salaried officers. In very few cases is the president of 
an association compensated for his services. In only two asso¬ 
ciations included in this study is the vice-president compensated. 

Some associations pay a fixed salary to certain officers from 
year to year. In other associations, compensation is not fixed, 
but the amount is decided upon from year to year. Instead of 
paying a regular salary, some associations remit dues to certain 
officers as payment for their services. In a few cases the secre¬ 
tary or treasurer or similar officer is paid a salary and his dues 
are remitted also. 

Some associations pay the secretary or treasurer a percent¬ 
age of the dues collected. Following this practice one associa¬ 
tion gives its secretary 2 y 2 % of the dues he turns over to the 
treasurer; and its treasurer 1% of all amounts he receives from 
the secretary less the cost of his (the treasurer’s) bond. 

A southern Virginia association—one of the few which pays 
all its officers—compensates them as follows: president, $150 
a year; vice-president, $75 a year; secretary-treasurer, $250 
a year; members of relief committee, $50 each, yearly; directors 
other than president, vice-president and secretary-treasurer, 
50 cents for each meeting attended. This society makes semi¬ 
annual payments for the services of its officers. A Pennsyl¬ 
vania association compensates its secretary-treasurer and each 

60 


member of the relief committee. A Kentucky fund pays its 
president and vice-president $3, its financial secretary $12, 
its treasurer $9 and the recording secretary $6 a year. An Ohio 
association pays its president $10 a year and its secretary- 
treasurer $100. 

A New England fund allows its secretary $20 a year. A 
Philadelphia association pays its recording secretary $48 a 
year, its financial secretary $52 a year in quarterly payments, 
and compensates its treasurer by remission of dues. A Mil¬ 
waukee fund gives its secretary $25 and its treasurer $10 a year. 
The secretary of a Massachusetts association receives $100 a 
year and the treasurer $50. The auditor or auditors of some 
associations receive a yearly compensation. A common 
amount is $5 to $10. One association deviates from the general 
practice somewhat in paying its three auditors $1.25 each for 
a term of three months. A Boston association pays its secretary 
and treasurer a salary of $15 a year and also remits their dues. 

The advisability of paying to officers salaries which may 
make the offices an object of interest on pecuniary grounds is 
a question deserving of careful consideration. None of the 
associations studied in this investigation reveal any unfavor¬ 
able effects of such a practice, because in the majority of cases 
the compensation of officers is nominal, but it is not difficult 
to imagine the possible effects of such a policy on the attitude 
of both members and officers toward the society. 

It would seem a natural question to members that if a fund 
can pay whatever benefits it does under a high salary over¬ 
head, it ought to be able to do even better on a smaller salary 
margin. If no other arrangement could be made it might be 
better for the company to make part of its contribution in the 
form of a part-time service of one of its office force who would 
be agreeable to the fund members. Such an employee could 
either receive a small aditional salary from the company for 
his services to be given on company time, or the association 
could pay him. Any expense thus incurred by the company 
could be deducted from its regular contribution to the society 
if desired. 

Where high salaries are paid for officers’ services there is a 
danger that the wrong type of employee will seek office merely 
because of the emolument attached thereto. Incidentally the 
association will lose some of the atmosphere of service and co- 

61 


operation characterizing associations paying only nominal 
compensation to its officers. There is apparently no reason 
why a secretary or treasurer who handles the bulk of the 
clerical and other work of the society should not be reasonably 
compensated, but there is always the possibility that this 
compensation, because of its amount, may become too great 
a drain on the association’s funds. 

Bonding of Officers 

The question of the bonding of officers is one to which many 
associations have given special consideration. In most in¬ 
stances, bonding of officers is confined to those who handle the 
funds of the society—usually the secretary, financial secretary 
or the treasurer. In one fund studied, all of the officers are 
bonded, including the president, vice-president, secretary and 
treasurer. 

The amount of bond required differs considerably among 
associations. One association, for instance, which has a record¬ 
ing secretary, a financial secretary and a treasurer, requires a 
bond in the sum of $800, of its treasurer only. Another, having 
the same officers, bonds its treasurer for $1,000. An Atlanta 
society bonds its secretary-treasurer for $5,000. Still another 
society bonds its secretary and treasurer each for $500. A New 
England association bonds its secretary for $500 and its 
treasurer for $1,000. A Michigan association directs that the 
treasurer “shall furnish a bond,” but stipulates no amount, 
this to be left to the discretion of the board of trustees. Simi¬ 
larly a New York association bonds its treasurer, “for an 
amount sufficient to the protection of the association, which 
amount shall be fixed by the board of trustees.” The secretary 
of an Illinois association is bonded for $1,000, and the treas¬ 
urer for $5,000. A New York association bonds its president 
for $5,000, its vice-president for a similar amount, its secretary 
for $1,000, and its treasurer for $5,000. 

The examples cited are sufficient to show the diversity of 
practice with regard to bonding. In almost all cases the 
company or the association pays the cost of the bond. 

Term of Office 

There is more or less similarity in the matter of the period 
for which officers are elected in different associations. In a sur¬ 
prisingly large number of constitutions, the period of service 

62 


of officers is not mentioned at all, from which it may probably 
be inferred that the term of office is one year. The president, 
vice-president, secretary, treasurer and similar officers usually 
hold office for periods of six months or a year. Trustees are 
frequently elected to hold office for from one to three years. 

Where an association is managed jointly by employers and 
employees, one or more officers are frequently appointed by 
the establishment and hold office indefinitely. This is espe¬ 
cially true of such officers as the secretary or the treasurer. In 
other cases also, the company may merely suggest one of its 
office employees for secretary or treasurer, and it is tacitly 
understood that this officer shall be re-elected each year as 
long as his services are satisfactory. 

Committees 

Beside the various officers mentioned, the majority of 
associations have one or more committees who supervise, 
direct or assist in the conduct of certain association practices 
or policies. 

Some of the more common committees are: advisory, relief, 
membership, visiting, entertainment, sick, finance, investi¬ 
gating, investment, trial, auditing and executive. 

The advisory committee, as it exists in a Pennsylvania 
association which is under the supervision of the company 
relief department, has “general supervision of the operations 
of the department” and sees that they are conducted in 
accordance with the regulations. The duties of the relief com¬ 
mittee as outlined by one association are, in general, to investi¬ 
gate and report on all cases of disability. Duties of a member¬ 
ship committee range from endeavoring to get new members 
to welcoming, introducing and looking after the general 
welfare of members. The entertainment committee, as its 
name implies, has charge of all entertainments or social affairs 
given under the auspices of the society. The duties of the 
visiting committee, as it exists in several associations, are 
similar to those of the relief committee above noted, as are 
the duties of the sick committee also. The duties of the finance 
committee of a New York association parallel those of the 
auditing committee of other associations. 1 

An Indiana association having an investigating committee 
prescribes that this committee “shall investigate all claims for 

^ee pp. 59, 69. 


63 


weekly sick and accident benefits and death benefits, visit 
sick and disabled members, approve all applications for 
membership and perform any other duties that may be referred 
to them by the official board.” A Massachusetts association 
has an investigating committee operating on the same lines. 
A trial committee of an eastern association is created to investi¬ 
gate claims of misdemeanors on the part of a member, hearing 
all sides of the case and submitting a written report of its 
findings. A New England association requires of its investment 
committee “to determine how the funds of the association 
shall be invested and to invest same.” It also stipulates that 
“it shall be optional with said committee to invest said funds 
with Company at a rate of interest satisfactory to said invest¬ 
ment committee, but it shall not be obligatory upon it to do 
so.” The work and duties of executive and auditing committees 
have already been explained in connection with the description 
of the duties of association officers. 

Meetings 

No set practice is followed by associations with regard to 
meetings. Practically all of the associations studied provide 
for the holding of an annual meeting for the election of officers 
and the consideration of association business. In those associa¬ 
tions where officers hold office less than a year, it is necessary 
to hold meetings more frequently. In one association already 
mentioned, which is managed entirely by the company, no 
meetings are held. Management is in the hands of the com¬ 
pany, there are no officers, and all business is transacted under 
the auspices of the employment office. 

Besides the annual meeting, held by almost all associations, 
special meetings may be called by the executive or the govern¬ 
ing body, on request of a certain number of members, or when 
necessity arises, to consider special business relating to the 
association. Such meetings may be called at the request of 
ten members or more. In one society, fifteen members must 
sign a request for a special meeting. Its constitution specifies 
that “no business shall be proposed or transacted at said 
meetings other than that specified in the request, and notice 
of same shall be posted on the time clock bulletin boards at 
least one week before the date of said meeting.” In the same 

64 


association, eighteen members in good standing constitute a 
quorum for the transaction of business. 

In associations where a governing body exists, this body 
meets at more or less frequent intervals. In the association just 
mentioned, for instance, the executive board meets on the 
third Thursday of each month, and otherwise at the call of 
the president. Five members constitute a quorum for the 
transaction of business. To the jurisdiction and direction of 
the governing body, where such exists, much of the routine 
business of the association may be left. This necessitates very 
few meetings of the association as a whole. 

The question of the time and frequency of meetings is one 
for each fund to settle for itself. It is comparatively easy for 
an association to decide the best policy to pursue in this 
respect. 

In most of the associations studied a definite order of 
business or program is laid down in the constitution or by¬ 
laws for the conduct of meetings, especially the annual, semi¬ 
annual or similar regular meetings. 

It is customary for a society to be governed in its meetings 
by standard rules of order, such as Roberts’ Rules of Order or 
Cushing’s Rules of Order. In a few cases the rules of order 
followed are compiled by the society and are printed in the 
constitution or by-laws. 

A few organizations, especially those which meet fairly 
often, make their meetings more or less social in nature. Any 
social features are, of course, subordinated to the business 
session of the meeting. 

In order that members may have the proper interest and 
enthusiasm with regard to meetings, experience has shown 
that they should be made as interesting as possible. Not only 
should meetings be announced beforehand either by postal 
card, bulletin or some other means or by the combined use of 
a number of agencies, but members should be made to feel 
that it is their duty and business to attend meetings. When 
they get to the meeting they, should find a program so planned 
as to maintain interest from beginning to end. 

Handling of Funds 

In considering the various features relating to the handling 
of association funds, the following questions arise: (1) Is the 

65 


society or the establishment the custodian of the funds; and 
in either case what officer or official is designated to handle the 
finances? (2) Are the funds deposited with the company or in 
a bank, and do funds draw interest in either case? (3) How and 
by what officer or agency are investments made? (4) What 
regulations govern the drawing, signing and countersigning of 
orders and vouchers? and (5) What arrangement is made for 
auditing the association’s accounts? 

There is considerable diversity of practice among associa¬ 
tions in the matter of handling funds. In some instances the 
funds are collected and disbursed by the company, usually 
through one man—the paymaster, cashier or treasurer of the 
company, subject to the approval of one or more officers of 
the association. In employee-managed associations, the control 
and care of the funds is in the hands of one or more officers of 
the fund. The investment of funds is frequently directed by 
the establishment, even in the case of employee-managed 
associations. In some associations, however, the investment of 
funds is in the hands of a special investment committee or the 
governing board. In some cases funds are deposited with the 
establishment, which pays interest on them. In others, the 
funds are deposited in a bank. 

Certain well-defined rules obtain in the different associa¬ 
tions with regard to the drawing and signing of orders covering 
disbursements and the drawing, signing and countersigning of 
vouchers. 

As previously pointed out also almost every society has 
either an auditor or auditing committee whose duty it is to 
make periodical examinations of the finances of the society. 

Custody of Funds 

Practices in respect to the custody of funds differ. In the 
larger number of cases the funds are handled by the association 
itself through some officer such as the secretary or treasurer. 
Where the funds are handled by the establishment, the pay¬ 
master, cashier or treasurer of the concern is usually designated 
for this work. 

In an Illinois society which is controlled by the company 
the latter takes charge of and is responsible for all moneys 
belonging to the sick benefit fund. A western Pennsylvania 
fund which is conducted by the relief department of the 

66 


establishment provides that “the company shall have the cus¬ 
tody of all moneys belonging to the relief fund and be respon¬ 
sible for their safe keeping.” No definite official is designated 
to handle the funds of this society, but inasmuch as dues are 
deducted from the payroll, the paymaster or whoever makes 
up the payroll is no doubt the responsible official. A Wisconsin 
company has arranged with an insurance company to cover all 
employees with a sick and accident policy. This provides 
benefits similar to those of a regular benefit association and 
the company assumes entire charge and management of the 
plan, collecting and handing to the insurance company the 
funds of the association. 

In a great many associations the treasurer is the one selected 
to care for the funds of the association. Frequently he attends 
to both the collection and the disbursement of the funds. In 
some cases, however, the collection of the funds is in the hands 
of the secretary or financial secretary, and the treasurer receives 
such funds for deposit and makes the necessary disbursements. 

Deposit of Funds 

As already suggested, association funds are either deposited 
in a bank or with the establishment. It has not been possible 
to discover just how many of the funds deposited in banks 
draw interest. In a few of the associations studied, however, 
where the funds are deposited with the establishment, a 
definite rate of interest is mentioned. 

An Indiana association directs its treasurer to deposit all 
moneys in a given bank. A Rhode Island fund directs the 
treasurer to deposit all moneys in “some bank designated by 
the Board of Directors.” This plan is followed by two New 
York associations and by a New England fund. A large 
number of associations have this same regulation. The consti¬ 
tution of a Massachusetts society stipulates that the treasurer 
is to “deposit all funds as the investment committee may 
direct.” Another New England association follows the same 
rule. The treasurer of a central New York association is 
directed to deposit funds with either the establishment or 
with a designated bank. Interest at the rate of four per cent 
per annum is allowed to one fund which is under the super¬ 
vision and management of the company’s relief department, 
and the moneys of which are in the custody of the company, 

67 


Investment of Funds 

The question of the proper investment of funds receives 
special attention in many associations. While many societies 
leave this function to a certain officer or officers, others have 
special investment committees. Frequently it is stipulated that 
investments are to be carried out under the direction and 
sanction of the governing body. In other cases, the establish¬ 
ment assumes the responsibility for investing the society’s 
funds. 

A New Jersey association provides that its treasurer is “to 
hold or invest the funds of the association under the direction 
of the board of trustees.” One Ohio association provides that 
“all surplus funds over $5,000 shall be invested in the name 
of the association by the president, secretary and treasurer, in 
some safe and profitable investment, as the board of directors 
may determine.” The treasurer of a Connecticut society is 
“empowered to invest the funds of the association subject to 
approval by the directors.” This is a very common arrange¬ 
ment. In a Kentucky association the provision governing in¬ 
vestment of funds is as follows: “The trustees shall . . . have 
supervision over investment . . . and shall take care that 
good securities or mortgages are bought therewith, and shall 
turn over the same to the treasurer of the society for safe 
keeping.” 

A special investment committee of an eastern association is 
“to determine how the funds of the association shall be in¬ 
vested and invest same.” The constitution of this society 
further stipulates that such funds may be invested with the 
establishment at a rate of interest satisfactory to the invest¬ 
ment committee, but that such an arrangement is optional. 
The constitution of another association in the same state con¬ 
tains a similar provision. 

A New Jersey society assigns to the trustees, under the 
sanction and direction of the board of officers and directors, 
the investment of surplus funds. 

Withdrawal of Funds 

While the general principles governing the authorization, 
drawing, signing and countersigning of all orders and vouchers 
covering the disbursement of association funds are somewhat 
similar, their application in individual cases differs. In the 

68 


majority of instances, the treasurer is directed to pay all 
orders drawn by one of the officers or the governing board and 
attested or countersigned by a certain officer or officers. 
Vouchers covering disbursements for bills and claims are usually 
signed by the treasurer and countersigned by one other officer, 
frequently the recording secretary or the financial secretary. 

“All warrants for money shall be authorized by a majority 
vote of the board of officers and directors at a regular weekly 
meeting. All warrants for money of this association shall be 
signed by the treasurer and president or secretary.” So reads 
the constitution of one association. In an association managed 
jointly by the company and the employees it is provided that 
the treasurer of the company “shall act as treasurer of the 
association” and that he is to make disbursements only upon 
the written authority of the board of trustees. The treasurer 
of another fund pays all claims presented by the executive 
board, attested by the secretary and countersigned by the 
financial secretary. The financial secretary countersigns all 
checks or vouchers issued by the treasurer. Another associa¬ 
tion requires that all orders for disbursements must be drawn 
by the president and attested by the secretary. 

All checks are signed by the secretary and countersigned by 
the president in a New England society. One association 
requires orders for disbursements to be authorized in writing 
by the executive board, signed by the president, and attested 
by the secretary. The treasurer of a Kansas society is directed 
to “pay all accounts by check only, signed by himself and 
countersigned by the assistant treasurer, such checks to be 
paid only on itemized vouchers attached to orders drawn and 
signed by the president and approved by the chairman of the 
finance committee.” Another association requires a written 
order signed by three directors for disbursement of funds. 

Auditing of Accounts 

Practically every association makes some provision for the 
■auditing of the funds at stated periods. As has been set forth 
in another section of this report 1 this work is in the hands either 
of a regular auditor or an auditing committee. In some cases 
the auditor examines and approves all claims and approves 
the vouchers issued to satisfy claims. In most cases, however, 
^ee p. 59. 


69 


» 

the auditor or the auditing committee exists merely to examine 
the books and accounts of the association at regular periods. 

An auditing committee of three is appointed annually by 
the president of one association, the duty of this committee 
being to examine the accounts of the financial secretary and 
treasurer quarterly. A Michigan association provides for the 
auditing of its books quarterly by the auditing department of 
the establishment. In addition to examining quarterly the 
books, accounts, vouchers and securities of the association, 
the auditing committee of a New England society is also 
directed to countersign all financial statements of the treas¬ 
urer. 

An auditing committee of three in a Massachusetts associa¬ 
tion audits the books of the financial secretary, the treasurer 
and all committees handling moneys of the association every 
six months. The same plan is followed by a New Jersey society. 
A South Jersey association provides for the auditing “of the 
affairs of the association” at the close of each fiscal year by a 
certified public accountant. One association requires the 
finance committee “to see that the books of the secretary, 
treasurer and trustees are kept correctly.” The books are 
examined quarterly and a report of their condition made to 
the next meeting of the society. 


70 


V 

CONTRIBUTIONS TO FUNDS 
A. Contributions by Members 

Dues and Assessments 

Members’ contributions to the funds of a mutual benefit 
association take the form chiefly of dues or assessments, or a 
combination of the two. An initiation fee may also be collected 
on joining the association. Dues, in contrast to assessments, 
which are irregular as to amount and time of payment, are 
definite amounts payable at stated intervals. Assessments 
are of two kinds, ordinary and extraordinary. The former 
are levied to meet the normal expenses of a fund, the latter 
to provide for contingencies. Some associations obtain funds 
from their members through a combination of dues and 
assessments, in which case the assessments are made either 
upon the death of a member or when the amount in the treas¬ 
ury falls below a certain figure. 

Of the 382 associations studied in this investigation, 160, or 
42%, raise revenues through dues alone, 213, or 56%, through a 
combination of dues and assessments, and 9, or 2%, through 
assessments alone. Of those using both dues and assessments, 
64% resort to assessments only in case the treasury requires it, 
20% make assessments only upon the death of a member and 
16% utilize this method of raising funds upon either the death 
of a member or the depletion of the reserve in the treasury. 

Combination of Dues and Assessments 

Opinion is divided as to whether mutual benefit associations 
should be supported by dues alone or whether there should be 
a provision for the levying of assessments in cases of emer¬ 
gency. A number of associations prefer to avoid assessments 
altogether. 

Thus the constitution of one association states that no 
assessments shall be levied for the payment of benefits for 
sickness, disability or death, but such benefits shall be paid 
out of the funds of the association received from dues or any 
other source and “shall only be payable to the extent to which 

71 


such funds are adequate for the payment thereof.” Such an 
association, unless its dues are on such a scale as to provide 
for the creation of a surplus large enough to meet the payment 
of benefits during extraordinary times, such as a period of 
epidemic, might not be able to furnish protection to the 
members at the time it is most needed. Conversely, of course, 
a rate of dues that would be ample to provide for such con¬ 
tingencies might be unnecessarily high during normal times. 

In another association no provision is made for levying 
assessments when the treasury is depleted and no benefits are 
paid under such circumstances till the payment of the next 
month’s dues. Such a provision, as in the case above, is liable 
to result in the loss of protection for members just at the time 
it is most needed. By the levying of assessments when the 
surplus in the treasury becomes low, this situation could be 
avoided. The cost to the individual member would be small 
and the association would be able to fulfill its purpose of pro¬ 
viding protection for its members at all times. 

The levying of assessments in case of emergencies, combined 
with dues sufficiently large to pay all normal benefits and 
build up a reserve, was recommended by one of the Board’s 
correspondents in the following terms: 

“Dues should be established on the basis of meeting 
current obligations and acquiring a reserve fund, and when 
such fund has been acquired, suspension of dues to all mem¬ 
bers who have paid in the per capita amount required. 
Provisions for special assessments should be made to meet 
emergencies.” 

A combination of dues and assessments was favored by the 
association in a Pennsylvania electric company for the follow¬ 
ing reason: 

“If a plan covers dues only, they must be high enough to 
take care of extreme conditions, which do not always materi¬ 
alize.” 

There is provision in this association for an assessment on 
the death of a member. This, however, is applied only to a 
minimized extent. 

The experience of the association in a western electric com¬ 
pany leads it to favor a combination of dues and assessments: 

“In times of emergency such as the ‘flu’ epidemic it was 
necessary to make a special assessment in order to keep the 
organization running without depleting too far the emergency 

72 


fund. It is seldom necessary to make assessments if the dues 
are properly proportioned.” 

The constitution of the association in a middle western 
plant states: 

“When the amount of the treasury shall fall below $500 
there may be an assessment made upon each member for 
an amount equal to that of his regular monthly dues.” 

One of the company officials in this plant, however, gave as 
his opinion that “the dues should be sufficiently large to take 
care of the needs of the association without special assess¬ 
ments.” 

The following are examples of the manner in which different 
associations provide for the levying of assessments: 

“Should the funds of the association at any time be in¬ 
adequate to meet the demands made upon them, the board 
of directors shall be empowered to call a special meeting of 
the association, stating the object of the meeting in the call 
to devise means to meet the deficiency either by ordering an 
assessment or otherwise.” 

* * * * 

“When the amount in the treasury of the association is less 
than $500, every member of this association may be sub¬ 
jected, at the discretion of the board of directors, to assess¬ 
ments not exceeding 50 cents per month in addition to the 
regular dues.” 

* * * * 

“Whenever the funds of the association will not allow of 
the payment of the regular and stated benefits, there shall 
be a ‘pro rata’ assessment levied upon the membership, 
sufficient to'meet such payments.” 

* * * * 

“If the funds of the association become exhausted, the 
board of directors may, by a two-thirds vote, levy an assess¬ 
ment on the members not to exceed their regular dues per 
month, in addition to the regular dues, until the treasury is 
replenished.” 

* * * * 

“The president, with the consent of the board of officers, 
shall have power at such times as in their judgment is just 
and necessary to levy an assessment on the members of the 
association to meet the contingencies of excessive sickness 
or accident, provided: first, that such an assessment shall 
not exceed 50 cents for first class and 25 cents for second 
class members, nor shall such assessment be levied more 
than twice in one year. Second, further assessment may 
be levied by a two-thirds vote of the members present at 
any regular or special meeting.” 

One association provides that a member shall not be liable 
for a special assessment until he has become a beneficiary. 

73 


Dues Only 

While a large number of employers favor the creation of 
funds through a combination of dues and assessments, the 
latter to be levied only in case of emergency, the general 
opinion seems to be against obtaining funds through assess¬ 
ments alone. This is because under such a plan the members 
of the association are unable to determine what the annual 
cost will be, and this element of uncertainty is bound to react 
unfavorably on the association. The members never know 
when they are going to be called on for an assessment or how 
much it will be. They are likely to get the impression that the 
association is not on a sound basis and to lose confidence in it. 
Even though the cost to them be the same whether funds are 
raised through dues or assessments, the prejudicial psycho¬ 
logical effect resulting from levying assessments is generally 
regarded as sufficient reason for choosing the method of raising 
revenue by dues. 

A company official in a middle western clothing concern 
expressed in the following way his preference for the creation 
of funds through dues, rather than through assessments: 

“We prefer to derive funds through fixed dues rather than 
by assessment, for we think that any member should have a 
definite idea of the cost of participating in any organization 
he joins, which is not possible under an assessment provision. 

Another employer said that, from his experience, assessments 
“are dreaded and more than apt to cause dissatisfaction.” 
An eastern company expressed itself on the question thus: 

“Most emphatically we do not believe in levying assess¬ 
ments at unknown periods. We have fixed definite dues and 
the understanding is that if these dues are more than sufficient 
the rate will be reduced. If they are found to be insufficient 
we shall increase the dues.” 

Declaration of Dividend or Suspension of Dues 

The alternative to making provision for levying assessments 
when the state of the treasury necessitates such action is to 
place the dues on such a scale as to insure payment of benefits 
and, in addition, build up a substantial surplus. When this is 
done an association will at times find it unnecessary to collect 
dues for a certain period. The problem may then arise of de¬ 
termining the best way of lowering the cost to the members. 
This is usually done either by declaring a cash dividend or by 
suspending or reducing dues for a time. 

74 


The effect of the declaration of a dividend or the suspension 
of dues upon the members of an association is in marked con¬ 
trast to that caused by the collection of assessments. An il¬ 
lustration of the results accomplished by the declaration of a 
cash dividend is provided by the experience of the association 
in a middle western manufacturing company. In less than a 
year after the reorganization of the association, when the 
assessment system was abandoned and revenues were raised 
through dues, two weeks’ dues in cash were returned to each 
member with a statement that the association was prospering 
and did not need the money. At the same time the members 
were shown that an increase in the membership would be 
helping the association. It is reported that: 

“During the following six months the initiation fees from 
new members admitted more than made up for the dividend 
declared. It is not possible to measure all the good accom¬ 
plished by this dividend, but every member had increased 
confidence in the soundness of the association and was 
boosting it along. Enthusiasm felt for anything about a 
plant must of necessity be associated in the minds of the 
employees with the plant itself, so the indirect benefit to the 
employer was worth consideration, and the enlarged member¬ 
ship benefited both association and employer.” 1 

The declaration of a dividend of this kind as the result of a 
large balance in the treasury of an association is not to be 
confused with the declaration of an annual dividend by dividing 
whatever surplus there is among the members at the end of 
each year. The following clause, from the constitution of an 
association which divides among the members each year the 
money remaining in the treasury, shows the distinction be¬ 
tween the two methods: 

“At the annual meeting, the balance of money, if any, 
remaining in the treasury, shall be divided among the mem¬ 
bers pro rata, provided, however, that not less than 10% or 
more than 20% of all money in the treasury shall be retained 
as a contingent fund to be used in all cases of emergency, and 
pending the collection of the next month’s dues.” 

In other associations a pro rata distribution of the funds is 
made among the members only when the amount in the treas¬ 
ury exceeds a certain sum, as in the association in a Michigan 
machinery plant, under the following provision: 

“If on the first day of December of any year, the funds of 
the society exceed the sum of $1,000, the excess over $1,000 
X W. L. Chandler, “The Employees* Mutual Benefit Association,” Industrial 
Management , New York, June, 1918, p. 467. 

75 


shall be distributed pro rata to all the members who have been 
in good standing for a full year, except that all who have 
been in a good standing for six months or more shall receive 
their share of the surplus on the basis of six-twelfths as much 
as a one-year member to a six months* member, seven- 
twelfths to a seven months’ member, eight-twelfths to an 
eight months* member, and so on.” 

The association in an eastern forging mill, instead of declar¬ 
ing a dividend when the amount in the treasury exceeds a 
certain amount, reduces the amount of dues levied. 

“All members shall contribute dues as stated, as long as 
the funds of the association are less than four hundred ($400) 
dollars. Should the funds reach that amount the contribution 
by each member shall be reduced one-half (K) until the 
funds of the association fall below two hundred and fifty 
($250) dollars, when full amount shall be resumed.” 

In some associations, suspension or reduction of dues applies 
only to members of a specified length of membership. 

“When the benefit fund of the association shall amount 
to twenty-five hundred dollars ($2,500), the payment of 
dues shall cease as to all members who have been in continuous 
good standing for one year or longer, until the benefit fund 
shall have been decreased to two thousand dollars ($2,000) 
when payment of dues shall be resumed. 

“Exemption from dues as above provided shall extend 
only to members proving themselves entitled thereto, by 
filing with the secretary a claim for exemption, showing 
date they were last employed by the company, which claims 
shall be verified by reference to the company payroll.” 

Another association provides that no member shall be 
exempt from dues “unless he or she has already paid ten 
weeks’ dues in addition to the initiation fee.” 

The association in a Connecticut plant manufacturing 
automobile parts provides for the reduction of dues when the 
amount in the treasury reaches a certain figure, but this 
reduction does not apply to a member until he or she has paid 
the regular dues for a year. 

“When the amount in the treasury shall reach two thousand 
dollars ($2,000), the dues shall be twenty-five (25) cents 
per month until said amount is reduced to one thousand 
five hundred dollars ($1,500) when regular dues of fifty (50) 
cents per month will be resumed. 

“Regular dues of fifty (50) cents per month, shall be 
collected from new members for the first year of their mem¬ 
bership, irrespective of any reduction of dues.” 

The experience of the association in an eastern shipbuilding 
company in suspending dues calls attention to the unfavorable 

76 


effect that such procedure may have when the period during 
which dues are not collected is a long one. In this case the 
balance in the treasury was sufficiently large to warrant 
the suspension of dues and they were not collected for six 
weeks. When the question of resumption of payment of the 
weekly dues was taken up, a large number of the members 
stated that they did not want to keep up their membership. 
During the period when dues had not been collected they had 
felt no need of the association and they decided that they 
could get along without it in the future. 

Such an occurrence can be avoided by suspending dues for a 
number of short intervals rather than for one longer period. 
The following clause in the constitution of one association is 
designed to meet this situation: 

“A recess or non-collection shall not occur at any two 
consecutive months unless especially set aside by the board 
of directors.” 

In general, it appears that dues should not be suspended or 
a dividend declared by an association without careful con¬ 
sideration of the advisability of such procedure and of its 
effect on the association’s financial status. 

Methods of Collecting Dues or Assessments 

There are two ways of collecting dues or assessments: de¬ 
duction by the company from the payroll, and collection by 
the association itself. Where dues are collected from the pay¬ 
roll, provision is also made whereby, in case a member has no 
pay coming to him on the regular pay day when his dues would 
be deducted from his envelope, it is necessary for him to pay 
them in cash to the secretary or treasurer of the association. 
If members object to having the money taken from their pay, 
in associations where dues are normally deducted from the pay¬ 
roll, they are sometimes allowed to pay their dues themselves. 

In some associations, in case of failure to deduct the dues 
from a member’s pay through error or for any other reason, 
the member must either pay the dues himself or notify the 
secretary or treasurer of the association of the error. The 
constitution of one association states, with reference to this, 
that if the dues of a member are not collected by the pay¬ 
master “the member shall pay his dues directly to the secre¬ 
tary of the society.” 


77 


Another states: 

“Each member shall know his own class and dues and if 
proper dues are not deducted from his pay, it is his duty to 
report the same to the employment manager in writing, so 
that he may avoid short benefits in case of sickness.” 

One association provides that failure of a member to notify 
the secretary of the association when the proper dues have 
not been deducted from his pay will bar him from benefits 
for sickness or disability if he becomes disabled before dues 
are paid. 

In another association in which dues may be deducted from 
the payroll if the member so elects, the company does not 
assume any responsibility for their collection. 

Other associations do not place the responsibility upon the 
member in case the proper dues have not been deducted, but 
allow him to remain in good standing, the omitted dues to be 
deducted from his next pay. 

In another association, failure- to deduct dues from a 
member’s pay does not debar him from benefits to which he 
would otherwise be entitled “provided such omission does not 
extend over two months or has been called by the member in 
writing to the attention of the proper authority.” 

It is a question whether it is advisable to bar a member from 
benefits because of an error made by the payroll department, 
although he may be rightly required to notify the association 
of the error that has been made. Where the payroll method of 
securing dues is in operation, one of the objects in view is to 
insure a steady source of income and to lessen the work of 
operating the association. The association profits thereby. 
A consequence of failure on its part to deduct the correct dues, 
to carry out its part of the contract into which it enters with 
the member when he joins, should not fall on the member’s 
shoulders alone. The arrangement whereby dues which have 
not been deducted are taken from the next pay without any 
loss of benefits to the member in the meantime, seems to be the 
most equitable method of dealing with the situation. 

Advantages of Payroll Deduction 

One of the vice-presidents of a Pennsylvania steel plant in 
which the association dues are deducted from the payroll 
described the advantages of the method of payroll deduction 
pf dues in the following way: 


78 


“It is convenient for the employees as well as for the 
association. It is an advantage to the members, for the reason 
that as long as they are employed it is almost impossible to 
become delinquent, and it relieves them of the burden of 
keeping in mind the fact that their dues are to be paid. It is 
convenient for the association as all money is collected at 
one time.” 

The managing secretary of a benefit association which 
embraces all the workers in the industrial concerns in a middle 
western city stated that better results were obtained by 
deducting dues from the payroll than by having the association 
collect them. 

“All our dues for factory employees are deducted from the 
payroll department, and with this method of payment the 
association guarantees to make good on any error that the 
payroll may make for failure to deduct dues providing the 
employee had money coming to him, at the time when dues 
should have been deducted. With a large membership, collec¬ 
tion of dues by the association entails too much clerical help 
and we find that among the members which we have who do 
pay at the office, known as office members, there are very few 
of them who might be considered prompt, most of them 
allowing a week or ten days to elapse. This entails a great 
deal of work to send them notices of their lapse in member¬ 
ship.” 

A company official of an eastern zinc concern was emphatic 
in his preference for the payroll method of deducting dues and 
stated that “we do not wish to have to operate a collection 
agency in addition to a mutual relief association.” 

A Massachusetts finishing company objected to having 
dues collected by the association because of the time it 
would necessarily entail. 

“The dues should be deducted from the payroll and handed 
over to the treasurer. The loss of time sustained by having 
a treasurer dun employees who are careless about their 
obligations, is an item not to be overlooked because neces¬ 
sarily it has to be done on shop time.” 

Deduction of dues from the payroll is preferred by a mid¬ 
dle western machine company, provided the association gives 
its unanimous consent to this method. Unanimous consent 
is deemed essential because “no man should have money 
taken from his pay envelope without his consent.” 

Deduction of dues from the payroll was preferred by a 
company official of an eastern electric company because it is 
“the most systematic method.” This company’s experience 
w£S that “if properly handled it adds but little work to the 

79 


payroll and therefore minimizes the work of the association 
operation.” 

The fact that deducting dues from the payroll relieves the 
member of all worry regarding his standing was one of the 
reasons why the association in an Indiana electrical company 
preferred that method. 

“Deduction of dues from the payroll is preferred because 
. . . it requires less time, operates almost automatically and 

is in the hands of only a few people who have proven their 
right to be trusted. An employee does not have to worry 
about paying his dues and always having the change avail¬ 
able for it. In the case of the absence of employees, it is much 
more easily taken care of.” 

Experience with both methods of collecting dues led one 
association to adopt that of deducting them from the payroll. 
For a number of years dues were collected from the individual 
members by the treasurers of the various sections, but due to the 
difficulties and inconveniences experienced in performing this 
duty and complications arising from claims for sick benefits 
when payment of dues was behind for several weeks, it 
was some years ago decided to collect all dues through the 
payroll department. “This has worked out remarkably 
well,” wrote the Board’s correspondent, who stated further 
that “in our association at least, it is a point of vital im¬ 
portance.” 

Disadvantages of Payroll Deduction 

Other employers, however, in whose plants dues are col¬ 
lected by the association itself, expressed themselves as well- 
satisfied with that method. The following came from a southern 
watch company: 

“We do not approve of the method of collecting dues 
through the medium of the payroll, on account of the great 
amount of effort required by our pay department to make 
the deductions. We have overcome this obstacle by appoint¬ 
ing a collector in each department, and we experience no 
trouble in keeping our dues up to date.” 

An eastern rubber company stated that it preferred col¬ 
lecting dues through department collectors because in this way 
the interest of the members was kept up. It was admitted, 
however, that the “payroll method might make for a more 
certain income.” 

The following statement by a company official of a New 
Jersey chemical company indicates his preference for the 

80 


payroll method, although the collection method is in force 
in that plant: 

“Deducting dues from the payroll would result in regular 
collections, and therefore be the least trouble. Our members 
pay personally, and this system calls for considerable follow¬ 
ing up.” 

In contrast to this is the statement of the president of an 
Illinois motor company in which the association dues are 
deducted from the payroll. “We would rather have the dues 
collected by the association, on account of the clerical work 
necessary when deductions are made from the payroll.” 

Deducting dues from the payroll is characterized by an 
Ohio company as “not conducive to the creation of individual 
responsibility”, and dues are accordingly collected by the 
association. 

In general, however, the payroll deduction method for the 
collection of dues is considered superior to that of using de¬ 
partmental collectors or having the member pay his dues in 
person, in that it entails less time and work on the part of 
the association and that it ensures regularity of payment. 
Where a company is willing to assume the work involved in 
deducting dues from the payroll it seems advisable for the 
association to adopt this plan. Provision may be made for 
payment in person by members who object to having the com¬ 
pany deduct dues from their pay envelopes. 

Intervals at Which Dues Are Paid 

Dues are usually paid either weekly, fortnightly or monthly. 
Provision may also be made for a member to pay as far in 
advance as he likes. A few associations collect dues quarterly; 
in one, dues are payable annually in advance. The great 
majority of associations prefer collecting dues either monthly, 
fortnightly, or weekly because the amount paid by members is 
smaller than where payments are made quarterly or annually. 
One association favored the weekly collection of dues from 
the payroll “as representing a small amount per week and 
consequently less burdensome to the employee.” 

Another association gave as its opinion that dues can best 
be collected at the time of paying the workmen. 

“Small dues are paid more willingly than large ones. 

This would mean that monthly dues or dues collected each 
pay day would be paid more willingly than quarterly dues, 
which would necessarily be larger.” 

81 


The association in a large rubber plant in Ohio collects its 
dues quarterly and states that “the weekly or monthly plan 
would require too much clerical help/’ 

Employees receiving their wages in weekly payments and 
accustomed to think of their income as so much a week would 
probably regard the collection of dues on a weekly basis more 
favorably than on a quarterly or annual basis. Where they 
are paid twice a month and where the clerical work involved 
is a factor that merits consideration, dues might be collected 
fortnightly or monthly without any prejudicial effect. Pro¬ 
vision might be made, however, whereby any member could 
pay his dues in advance quarterly or annually. 

Classification of Dues and Assessments 
Two hundred and twenty-five funds have but one class of 
membership. In the remainder, there is a classification of 
membership, and each class pays a different rate of contribu¬ 
tion either in dues or assessments or both. 

Those funds in which dues are a uniform percentage of 
wages are not considered as having different classes of mem¬ 
bership. Similarly, those funds in which uniform contribu¬ 
tions are collected and varying benefits are paid are omitted 
from consideration. 

Classification on Basis of Age 

The most common bases of classification of members in 
mutual benefit associations are by age and by wages. In some 
associations, dues vary according to length of membership, 
occupation, amount of benefit desired and sex. The following, 
for example, is the schedule of dues payable by the members 
of the association in a middle western plant: 

Age Dues Payable 

24 yrs. or less, 1.25% of straight time semi-monthly pay 

25 to 29 yrs., inch, 1.30% of straight time semi-monthly pay 
30 to 34 yrs., inch, 1.35% of straight time semi-monthly pay 
35 to 39 yrs., inch, 1.45% of straight time semi-monthly pay 
40 to 44 yrs., inch, 1.70% of straight time semi-monthly pay 
45 to 49 yrs., inch, 2.00% of straight time semi-monthly pay 
50 to 54 yrs., inch, 2.50% of straight time semi-monthly pay 
55 to 59 yrs., inch, 3.40% of straight time semi-monthly pay 
60 to 64 yrs., inch, 4.75% of straight time semi-monthly pay 
65 to 69 yrs., inch, 7.25% of straight time semi-monthly pay 

82 


Classification on Basis of Wages 
The dues of the association in a western packing plant are 
based on the members’ wages. All employees receiving 
$13.50 and under may enter one of five classes of membership 
in which the weekly dues are 15, 20, 30,40 cents, respectively. 
In the case of two classes in which the dues are 30 cents a 
week, there is a difference in the sick and death benefits, 
since an employee has the choice of $6 a week accident and 
sick benefit with $400 death benefit, or $4.50 a week accident 
and sick benefit with $600 death benefit. Employees earning 
over $13.50 and not over $18 a week pay 50 cents weekly 
dues; those earning over $18 and not more than $30 a week, 
75 cents and those earning over $30 a week $1 in weekly dues. 

Where wages are the basis for the classification of members, 
a member may elect to choose a class lower than that to which 
his wages entitle him, but he may not select a higher class. 
In some associations, when a member, through an increase in 
his wages, is transferred to a higher class of membership, he 
becomes eligible for benefits in his new class immediately upon 
transfer. In other cases he cannot draw the benefits of the 
new class to which he has been transferred till after several 
weeks. For instance, in an eastern forging mill where there 
are two grades of membership, the first requiring 80 cents a 
month and the second 40 cents a month dues: 

“Should a member change from the second grade to the 
first grade, he shall not draw the benefits of the first grade 
until six weeks after entrance into it, but shall in the case of 
sickness draw the benefits of the second grade, until these six 
weeks have expired.” 

On the other hand, 

“Members of the first grade changing to the second grade 
shall immediately on such change have claim only for the 
benefits of the second grade.” 

Classification on Basis of Length of Service 

In one association the dues are proportionate to the mem¬ 
ber’s length of service with the company. A member who has 
been in the continuous employ of the company up to six 
years pays 0.5% of his monthly wage in dues. If he has been 
over six and under ten years in the continuous employ of the 
company he pays 0.45% of his monthly wage, and if over ten 
years, 0.4%. 


83 


Other Classifications 

One association classifies its members according to whether 
they are entitled to benefits under any workmen’s compensa¬ 
tion act. All members “not employed at the manufacturing 
plants, mills or mines” of the company pay 1?4% of their 
monthly wage in dues. All members “employed at the manu¬ 
facturing plants, twine mills, steel mills” of the company who 
may become entitled to benefits under a workmen’s compensa¬ 
tion act pay l}4% of their monthly wage. 

Initiation Fees 

In addition to the income obtained from the members of an 
association through dues or assessments, some associations 
have an entrance or initiation fee. There may be a uniform fee 
or there may be a number of rates. The most common bases 
for the classification of initiation fees are age, wage, benefits 
desired or sex. Of the 382 associations studied, 200 have initia¬ 
tion fees, of which 160 are single rates. Twenty-two associa¬ 
tions have two classes of initiation fees, seven have three classes, 
three have four classes, one has seven classes, two have ten and 
eleven classes respectively. In three associations, the initiation 
fee is a certain percentage of the member’s weekly wages or of 
his monthly dues, which are based on his wages. 

Annual Initiation Fee 

Associations having an annual initiation fee are usually those 
that divide among the members the money in the treasury at 
the end of each year. 

In one association in which the initiation fee is $1, if a 
member loses his rights of membership as a result of leaving 
or being discharged from the company without having drawn 
any benefits within thirty calendar days after he became a 
member, the initiation fee is returned to him. If he is again 
employed by the company, he must pay the initiation fee on 
rejoining the association. If, however, a member leaves or is 
discharged from the company at a date later than thirty 
calendar days after joining the association, the initiation fee 
of $1 is not returned to him; but in this case, if at any future 
time he is again employed by the company and becomes a 
member of the association, he is not obliged to pay the initia¬ 
tion fee. 


84 


Graduation According to Age 

A number of associations have entrance fees graduated 
according to age. In one association, the initiation fees for 
applicants are as follows: between the ages of 21 and 22, 
50 cents; 22 and 25, 75 cents; 25 and 30, $1; 30 and 35, $1.25; 
35 and 40, $1.50; 40 and 45, $1.75; 45 and 51, $2. 

Another association has its entrance fees graded thus: 
between the ages of 16 and 35, $2; 35 and 40, $3; 40 and 45, 
$4; 45 and 50, $5. Still another association has a uniform 
entrance fee of $1 for all ages from 18 up to 40 and $1 addi¬ 
tional for each year after that. The age limit in this associa¬ 
tion is 50 years, at which age it would cost $11 to join. This 
may obviously operate so as to discourage older enployees 
from joining. The purpose of this plan, obviously, is to favor 
those employees who join when young. Some associations 
recognize that while employees who have failed to join till they 
were older may not be entitled to the same consideration as 
those who have contributed for a number of years, it is 
unwise to discriminate against them to the extent of making 
it prohibitive for them to join. If they are under the age limits, 
they may be allowed to join at the same entrance fee as other 
employees, with provision for either a higher rate of dues or a 
lower rate of benefits. The benefit associations in the plants of a 
large packing company, for example, have a higher schedule of 
dues for members 45 years of age and over than for those under 
that age. For members joining between the ages of 40 and 45, 
dues are one and one-half times the regular amounts; for those 
joining between 50 and 55, one and four-fifths times; and for 
those joining between the ages of 55 and 60, two and three- 
tenths times. 

Some associations, instead of graduating dues, graduate the 
benefits for their older members, on the ground that making 
distinctions in the dues each week is a source of trouble. Thus 
in a middle western plant, members who join the association 
between the ages of 46 and 50 receive 10% less benefits than 
the ordinary schedules; those joining between 51 and 55, 20% 
less and those between 56 and 60, 30% less. 

Graduation According to Rate of Benefit 

Initiation fees in some associations are graded according to 
the amount of benefits which the applicant wishes to obtain. 

85 


DUES ASSESSED BY COMPANY RELIEF AND BENEFICIAL ASSOCIATION, 1905 TO 1922 INCLUSIVE 



86 



































































One association which pays benefits to salaried employees only 
after the company ceases to pay such members 70% of their 
weekly salary, does not require these members to pay the 
initiation fee when joining. 

Other Variations of Initiation Fees 

Some associations have higher dues for a number of weeks 
immediately after joining instead of an initiation fee payable 
before joining. Thus one association, in addition to the regular 
dues, collects 40 cents every fortnight for 14 weeks after 
joining. In the case of a member who joins one month after 
his employment begins this is reduced to 20 cents. In this 
way the employee is induced to join within a month after he 
enters employment. 

Effect of Initiation Fee 

In an association where membership is compulsory an 
initiation fee at a time when labor turnover is high is a re¬ 
munerative source of income. This is evidenced by the ex¬ 
perience of a Pennsylvania steel company where to all in¬ 
tents and purposes membership in the mutual benefit associa¬ 
tion is compulsory. As a result of the large increase in the 
number of employees during the war period, 1915-1918, each 
of whom paid an initiation fee of 60 cents on joining the as¬ 
sociation, monthly dues were collected only four times in 
1915, three times in 1916, twice in 1917 and four times in 
1918. The table on page 86 shows the cost in monthly dues 
to the members from 1905 to 1922. 

Revenue from Social or Recreational Activities 
Dances, dinners, excursions, field days and other social and 
recreational activities frequently provide additional sources 
of revenue for mutual benefit associations. In some cases 
members are compelled to purchase a number of tickets for the 
association entertainments. In other cases gatherings of a 
social nature are held not for the purpose of making money but 
simply to provide a good time for the members and to enable 
them to get to know each other better. In a plant where 
there is no other organized method of handling social or 
recreational activities for employees the mutual benefit 
association may well be utilized for this purpose. 

The holding of outings, moreover, may serve as a good 

87 


advertising device for the association. A number of associa¬ 
tions have reported to the Board an increase in membership 
following a successful picnic or excursion. The spirit of good 
fellowship that is developed through successful social gather¬ 
ings is reflected in an increased interest in the association, and 
the attention of non-members is drawn to its work. Activities 
of this nature also have a beneficial effect upon the members 
themselves, stimulating and maintaining their interest in the 
association. There is danger of an association becoming an 
automatic arrangement, taken as a matter of course by a large 
percentage of its members. While the aid rendered to a fellow 
member in case of sickness or accident is concrete evidence 
of the protection afforded, interest in it is likely to lag where 
dues are automatically deducted from the payroll and where 
no benefits have been received. A dinner, a picnic or a field 
day emphasises the social side of the benefits which the 
member derives. Morale, esprit de corps, and pride in mem¬ 
bership are thereby accentuated. 

Experience has shown, however, that an association should 
not be dependent on such activities for a large part of its 
income. Dues should be such as to provide ample margin for 
payment of the scheduled benefits, and while social activities 
may profitably be engaged in with a view to providing a means 
whereby the members can get together and enjoy themselves, 
they should not be considered as in any way taking the place 
of dues or assessments. 

The experience of the association in a Pennsylvania hard¬ 
ware plant offers a concrete illustration of the dangers of 
a contrary policy. Organized some fifty years ago, when the 
plant employed but a small fraction of the number now on the 
payroll, the association for a number of years relied upon its 
annual excursion to supplement the funds in the treasury. At 
the time of its initiation the excursion was a big drawing card 
and proved a good money-maker. With the growth in the size 
of the plant from a few hundred to several thousand, interest 
in the association waned, membership fell off, and it was found 
that the amount being paid out in benefits was increasing 
while that received from dues was decreasing. The funds de¬ 
rived from the annual excursion were not large enough to cover 
a deficit which should have been made up either by increasing 
dues, decreasing benefits or increasing the membership. 

88 


The extent to which associations engage in social or rec¬ 
reational activities varies greatly. In some plants other or¬ 
ganizations take care of this work, and the benefit association 
is solely an insurance proposition. In a few instances the 
mutual benefit association finances a social club or athletic 
field, to secure the privileges of which an employee must be a 
member of the association. In plants in large cities where 
amusements and recreation are easily obtained and where the 
employees’ homes are widely scattered, there is not the same 
scope for the development of social activities by an association 
as in a plant in a smaller and more isolated community. The 
following statement from the medical director of an eastern 
company having plants in a number of large cities as well as in 
rural communities is of particular interest in this connection: 

“After four or five years’ experience we have found that 
our employees are not greatly interested in recreational, edu¬ 
cation and social activities where plants are situated in cities 
or populous districts. . . . We do find, however, that in the 
remote sections the employees’ associations are very much 
worth while. Great interest is taken in community problems, 
health, sanitation, education and certain phases of economics; 
men take a keen interest, giving of their time and substance to 
the maintenance of medical service, schools, circulating 
libraries, etc.” 

The Conference Board has learned of a few instances in which 
mutual benefit associations operate commissaries orcooperative 
stores. By means of the income derived from the factory store 
which the association in a middle western sewing machine plant 
operates it has been enabled to reduce its weekly dues from 
25 cents to 5 cents. The space and equipment of the store, 
lighting, heating, etc., are donated by the company. This as¬ 
sociation, with weekly dues of 5 cents and a provision for an 
assessment when the state of the treasury warrants, pays a 
sickness and disability benefit of $10 a week for twelve weeks 
of the first twelve months, $5 a week for twelve weeks of 
the second twelve months and $3 a week for twelve weeks of 
the third twelve months. It also pays a $200 death benefit. 

The association in a Michigan brass plant derives funds from 
the operation of the plant kitchen and canteen. The company 
insists that it make a profit on the operation “but not to 
exceed about 10 cents per person employed per month.” 
This has formed an important source of income for the 

89 


association and, according to the Board’s informant, was 
partly responsible for the large surplus which was built up. 

Fines for Arrears and Reinstatement Fees 
Another source of revenue of associations is in the fines it 
imposes upon members for delinquency in dues. Some as¬ 
sociations also have a reinstatement fee which must be paid 
by members who have left the association. 1 

B. Contributions by Employers 

The financial assistance rendered to a mutual benefit 
association by the company in whose plant it is operating 
may be confined to assumption of the operating expenses in 
connection with running the association, or it may take the 
form of the contribution of a certain amount of money. 
Every association receives a certain, though indefinite, 
amount of company assistance, whether it be in the deduction 
of dues from the payroll or the privilege allowed the members 
of soliciting membership among the non-members. Such 
assistance as this, however, is not regarded by employers as 
constituting a contribution on their part. In this report, any 
financial assistance rendered by the employer is not regarded 
as such unless it takes one of the forms described below. 

Contribution According to Number of Members 
Some companies regulate their contribution to the associa¬ 
tion on the basis of the percentage of the employees who are 
members, as in a western concern manufacturing agricultural 
implements: 

“At the end of each year, if the average membership in the 
benefit association during that year has equalled 50% of the 
average total number of employees in the company’s manu¬ 
facturing plants, the company will contribute $25,000 to the 
fund, and if such average membership has equalled 75% of 
such total number of employees, the company will contribute 
$50,000 to the fund.” 

This company also agrees to advance funds for the payment 
of benefits when the amount in the treasury of the association 
is not sufficient to pay them. 

In other companies a certain amount per member is contrib¬ 
uted, irrespective of the percentage of employees who may 
belong. Thus a Rhode Island company contributes $2 per 
member per year. 
x See pp. 37, 38. 


90 


Contribution on Basis of Members’ 
Contributions 

Other companies base their contributions to the association 
on the amount contributed by the members. In addition, the 
company may assume the administrative expenses of the 
association. An eastern electric company contributes to its 
beneficial association on this basis: 

“The company, or its successors, and its or their affiliated, 
controlled or leased companies, will assume all the expense of 
medical service, clerk hire, office room, and all charges for 
stationery, and shall facilitate in every way, without any 
charge therefor, the investment and handling of the relief 
funds, from time to time for the benefit of the association, 
and shall further contribute to the said fund to the extent of a 
sum equal to the amount from time to time contributed by the 
employees, members of the association,until the total sum con¬ 
tributed by the employees, members of the association, and the 
company, or its successors, and its or their affiliated, con¬ 
trolled or leased companies, shall aggregate the sum of 
$25,000, after which time the company, or its successors, or its 
or their affiliated, controlled or leased companies, shall con¬ 
tribute a sum equal to fifty per cent of the amount contrib¬ 
uted by its employees, members of the association, until such 
accumulated fund shall amount to $100,000. After the accu¬ 
mulated fund of the association shall amount to $100,000 the 
sum to be contributed by the company, or its successors, and 
its or their affiliated, controlled or leased companies, shall 
be an amount equal to twenty-five per cent of the sum con¬ 
tributed by the employees, members of the association, until 
such time as the accumulated fund shall amount to the sum 
of $200,000, after which time the company, or its successors, 
and its or their affiliated, controlled or leased companies, shall 
make no further contribution, except at such time as the fund 
shall fall below $200,000, during which the company, or its 
successors, and its or their affiliated, controlled or leased 
companies shall contribute in the proportions, and under the 
conditions above set forth, until the said fund again reaches 
the amount of $200,000.” 

When the association in a southern shoe plant was started, 
the company paid into the treasury an amount equal to one- 
half the dues paid in by the members. After six months’ 
operation on this basis the treasury “dwindled down to almost 
nothing.” The association was reorganized, and the dues were 
slightly increased without changing the benefits. In addition 
to this, the company agreed to pay into the treasury one 
dollar for every dollar paid in dues by the members. This 
was necessary, according to the Board’s correspondent, because 

91 


. .it was manifest that the dues we were receiving, 
while perhaps sufficient under a period of years to just about 
pay benefits, were not sufficient for the association to build 
up a fund which would put it beyond the reach of bank- 
lllfruptcy.” 

A company official in a Massachusetts paper concern wrote 
regarding the payment by the company of an amount equal 
to that contributed by the employees: 

“This allows the paying of much larger benefits than could 
otherwise be paid, and the small amount it costs is more than 
made up in good will and the satisfaction of the employees who 
realize that they will receive regular compensation if they are 
sick and are provided with free physician’s services.” 

In other cases the company pays 10%, 20% or 25% of the 
amount contributed by the members in dues. In one case in 
which sickness and accident benefits are carried by the as¬ 
sociation and the death benefit takes the form of a group life 
insurance policy, the company contributes twice as much as 
the amount contributed by the employees. 

Contribution on Basis of Amount of Benefits Paid 

In some cases the company’s contributions are a certain 
percentage of the benefits instead of the amount paid by the 
members in dues. An eastern refinery donates an additional 
25% on all benefits paid to the members. The company con¬ 
siders that this proportion is “a considerable encouragement, 
although not to such an extent as to prevent the members 
feeling that'the association is their own.” 

A Pennsylvania publishing company duplicates all benefits 
paid by its association. The company’s policy has been to do 
as much for any employee as he is willing to do for himself. 
Duplication of benefits by the company means paying the 
individual employee such sick or death benefits as he is willing 
through the association to carry for himself. Other companies 
duplicate or pay a certain percentage of the death benefit 
alone. An Illinois company pays benefits in addition to those 
paid by the association in its plant; the amount varies ac¬ 
cording to whether the disabled employee is the head of a 
family or not. Three dollars a wepk is paid to a member who 
is the head of a family and $1.50 a week to a member who is 
not the head of a family. 


92 


Contribution in the Form of Life 
Insurance 

A number of companies provide free life insurance for the 
members of the mutual benefit association. In these cases the 
insurance cannot be obtained unless the employee joins the 
association. When the employee leaves the company he may 
convert the policy into a life or endowment policy of not 
greater amount at the rate of premium chargeable on such 
policies for the age attained when the change is made. In a 
middle western city where the employees of all local industrial 
establishments belong to a single mutual benefit association, 
an employee on leaving a company may continue to carry his 
insurance policy on the annual term basis. Thus, if the annual 
premium rate on a man aged thirty-five years is $3.38 per 
year, an employee of any of the local plants terminating his 
employment on the termination date of his policy and desiring 
to continue his policy would pay $3.46 the next year and so on, 
according to rates provided. 

Contribution of a Lump Sum 

A lump sum based either on percentage of members, on 
dues, or on benefits is paid by some companies to mutual 
benefit associations. An eastern pottery company contributes 
$2,000 annually to the association in its plant. Another con¬ 
cern, in addition to paying an amount equal to that contrib¬ 
uted in dues by the members, pays $2,000 per annum, quarterly 
in advance. 

Contribution on Basis of Aggregate 
Wages of Members 

In other cases the company contributes a certain percentage 
of the aggregate wages and salaries of the members of the 
association. A New York company which operates a pension 
plan in conjunction with its benefit department contributes 
‘‘an amount not less than one per cent of the aggregate wages 
and salaries of the members of this department.” Out of the 
funds contributed jointly by the company and the members 
are provided “benefits because of death or disability due to 
other causes.” The constitution of the plan states further that 
the company shall contribute to the benefit department an 
amount not less in the aggregate than: 

93 


“All sums disbursed by this department in the payment ol 
service pensions; and 

“All sums paid as premiums to the state insurance fund or 
other insurance carrier for workmen’s compensation insur¬ 
ance; and 

“All sums disbursed by this department in the payment of 
expenses of management, exclusive of sums expended for 
medical attendance, surgical operations, hospital treatment, 
medicines and surgical appliances, by reason of sickness of 
members and of accidents to members not arising out of and 
in the course of their employment by the company; and 

“All sums required from time to time to make good de¬ 
ficiencies in the funds of this department which may arise by 
reason of the contributions of the members thereof being 
insufficient to provide for the expenditures not provided for 
by the company’s contributions, as per the foregoing, or by 
reason of any other cause whatever; provided that moneys 
so contributed to make good deficiencies may be refunded 
out of any surplus thereafter arising in the funds of this 
department.” 

An Iowa concern which also operates a benefit department 
in several of its plants contributes to the department on a 
similar basis. In this case each of the plants in which the 
association is in operation pays one-third of one per cent of 
the aggregate wages and salaries paid by it to its employees 
who are members of the department; its share of all expenses 
of management (other than for medical attendance, surgical 
operations, hospital treatment, medicines and surgical ap¬ 
pliances), proportionate to its payroll; its portion of the sur¬ 
plus of a trust fund for the purpose of securing payment of 
benefits to employees and their dependents to whatever 
extent the-surplus may be required for this purpose; and its 
share of any sums required from time to time to make good 
deficiencies in the funds of the department whenever the 
members’ contributions are insufficient to provide for benefits. 

Payment of Interest by Company 
A number of companies who hold the funds of mutual 
benefit associations pay interest on the amounts thus held. 
Four per cent is the usual rate of interest. One company in 
which this is done makes a further contribution to the as¬ 
sociation to the amount of 10% of the net balance at the end 
of each year. 

Company Guarantee of Benefits 
A great many companies, while not contributing any stated 
amount to the funds of the association, guarantee the pay- 

94 


ment of benefits. Instances of this have already been cited 
where the company has promised to advance funds for the 
payment of benefits when the amount in the treasury is not 
sufficient for the purpose. This guarantee may stand alone or 
it may be in addition to the payment of certain sums to the 
association. The Board has found an almost unanimous ex¬ 
pression of opinion among employers to the effect that the 
company should come to the assistance of the association if it 
becomes involved in financial difficulties. Whether a guarantee 
of payment of benefits is formally expressed by the company or 
not, employers usually consider it incumbent upon them to 
stand behind the association and to be ready to render 
aid if it cannot support itself. 

The guarantee of sufficient funds for the payment of benefits 
may be made with or without any consideration of repay¬ 
ment to the company. An eastern silk company, in addition 
to contributing to the association one-quarter of the amount 
contributed by the members, guarantees the payment of all 
sick and accident and death claims. Any payments made by 
the company to make up for deficiencies in the funds of the 
association during a period of three fiscal years have to be 
made up out of whatever surplus may accumulate during the 
same three-year period. That is, if the association has to call 
on the company for financial assistance during each of the 
years 1922, 1923 and 1924, any repayments to the company 
have to be made out of the funds raised by the association 
during the same three years. If the company is not repaid at 
the end of 1924, the association is under no further obligation 
to it. 

Other Forms of Company Contribution 

Another company agrees to loan money to the association 
under the following terms: 

“The company hereby agrees to loan to the association, 
at 4 per centum per annum interest, not more than $200 at 
any time the treasury of the association shall not contain 
sufficient funds to pay legitimate benefits under this consti¬ 
tution and by-laws, provided that such loan shall not be made 
more than twice in one calendar year nor for a longer period 
of time than ninety days.” 

The money paid in fines by employees who are late forms 
one company’s contribution to its mutual benefit association. 

95 


Company Contributions on Organization of Associations 

Some companies have confined their contributions to the 
funds of the association to donations at the time the associa¬ 
tions were first organized. The immediate credit balance 
created in the treasury in this way places the association in a 
position where it can meet any demands that may be made 
upon it for the payment of benefits. 

One employer endorsed company assistance in the initial 
financing of an association in order that employees might obtain 
protection at the minimum cost: 

“We believe that employers should assist in financing a 
mutual benefit association, to what extent we have not 
determined, but having great interest in our employees and 
their welfare, we feel that the employees should be offered 
returns from the mutual aid association at a minimum cost, 
to benefit them to a greater extent than they could obtain 
elsewhere from a union, another mutual aid association or from 
a fraternal organization.” 

A middle western machine tool company favored company 
assistance in financing the association, but warned against 
allowing members to retain their membership after leaving 
the company. 

Company Contributions Refused by Associations 

The Board has learned of instances where the employees 
preferred to finance the benefit organizations themselves, 
although the companies have been willing to contribute 
financial aid. This was the experience of a Michigan agricul¬ 
tural implement company: 

“The Association was organized at the suggestion of the 
company and it was our original offer to assist in financing it. 

We made a proposition to the men several years ago that we 
would put in a dollar for each dollar which they subscribed 
in dues. They were suspicious at the time and flatly declined 
the offer on the ground that the company had some ulterior 
motive in making such a proposition. They announced their 
intention of forming an association of their own and under 
their own management. Without leadership this failed to 
materialize and they again approached the company for 
assistance. We notified them that we could not duplicate our 
original offer, but would take care of the bookkeeping and 
supply such printing as was necessary. They accepted the 
offer and the association was organized about ten years ago. 

It has operated successfully since that time.” 

Similarly, when the association in a New York pottery com¬ 
pany was being organized, the employees were asked if they 

96 


desired the management to assist financially in its operation. 
The result was “a unanimous verdict in favor of the men 
running the society themselves.” The only assistance which 
the employees asked for was clerical work, which is taken care 
of by the payroll and employment departments. 

In a Pennsylvania plant the company donated $200 to the 
association when it was organized. This was a gift on the part 
of the company, but rather than be under any obligation to the 
company the association paid it back when there was a suf¬ 
ficient surplus in the treasury. 

Employers who contribute financially to employees' mutual 
benefit associations are unanimously in favor of the main¬ 
tenance of the funds. The elimination of economic waste due 
to sickness is an object that deserves the support of every 
employer, and the mutual benefit association is one means 
that may be utilized for this end. Financial aid by a company 
not only enables an association to pay larger benefits and 
include in its membership employees who might otherwise 
have to be excluded in a self-supporting association, but is a 
concrete expression of the company’s interest in the welfare 
of the workers. 


97 


VI 


COMPANY PARTICIPATION IN ADMINISTRATION 
OF ASSOCIATIONS 

Closely linked with the question of financial assistance of a 
mutual benefit association by a company is that of company 
participation in its administration. While a number of em¬ 
ployers are of the opinion that the company should abstain 
from any participation in the management of associations, most 
companies favor some degree of indirect participation. Manage¬ 
ment should give the association its moral support, show the 
employees that it is interested in the success of the association 
and lend its counsel and advice for this end. This seems to be 
the prevailing opinion on the subject. 

Participation Confined to a Minimum 

One company which contributes $2,000 annually to the 
mutual benefit association in its establishment wrote that it 
did not think it wise for management to participate in the con¬ 
duct of an association “except to wisely counsel with the officers 
who are chosen from the employees.” 

The attitude of a Delaware rubber concern was that, apart 
from giving advice, management should allow the association 
“to function as it sees fit.” It was this company’s belief that 
“if the proper relation exists between the management and the 
employees, they will ask for advice.” 

In many companies, company participation is confined to 
taking care of the clerical work, providing a suitable place for 
the meetings of the association and deducting the dues from the 
payroll. One employer expressed the opinion that this should 
be the limit of company participation. 

“We believe the management should not participate in 
the conducting of the association directly, but should give 
moral support by providing assistance in the matter of a 
suitable and convenient place and time for meetings of offi¬ 
cials of the association, also in promoting economical ad¬ 
ministration by cooperation by paymaster of the plant rela¬ 
tive to collection of dues.” 

Two companies stated that they had found from experience 
that more efficient administration was obtained by management 

98 


taking over the routine work of the association than by leaving 
it in the hands of the employee officers. One of them wrote: 

Our office now looks after all routine work of the Asso¬ 
ciation instead of this work being done by one of the members 
who was paid a nominal sum for time spent in such con¬ 
nection. Unless an exceptional man is elected, the work is 
very inefficiently handled.” 

Other employers did not indicate in detail in what manner a 
company should participate in the management of the associa¬ 
tion but merely stated that the employees chief concern should 
be to see that the association is run in a business-like and effi¬ 
cient manner. One employer wrote: 

“In order to have an association of this kind appeal to 
the workers, the management should be largely in the hands 
of the workers, with just enough of guidance from the man¬ 
agement to insure efficient management and the adoption and 
maintenance of sound rules and regulations.” 

In an eastern electrical company the company appoints the 
general chairman of the association, whose duties are to “look 
after the interests of the association in general” and to “see that 
all transactions are carried out in conformity with the consti¬ 
tution and by-laws.” Nevertheless, “he must allow employees 
to run the association 95%.” 

An Illinois printing house, while convinced that management 
should participate in conducting the business of the association, 
believed that such participation “should be merely to guide 
and advise.” 

“Just as little as possible” was a western paint company’s 
view as to the desirable extent of company participation in 
administration. This company found it necessary only to start 
the association. Since then there have always been “enough 
good employees with good sense and judgment to constitute the 
official board and committees to carry on the work.” 

A Rhode Island foundry company favored participation in 
administration “merely to the extent of seeing that everything 
goes along properly.” It was not in favor of management being 
on the executive committee or board of directors of the asso¬ 
ciation. 

A number of employers cautioned against participating in the 
administration of an association to such an extent that the 
employees would get the impression that the company was 
actually running it. One company in which, according to the 

99 


constitution and by-laws of the association, the company 
treasurer must be its treasurer, stated: 

“We do not think the management should participate in 
the conduct of the Association except as it may be desirable to 
have some little representation to stabilize it or give it the 
moral backing of the management, but if the management 
has the appearance of actually running the Association, 
it detracts from its attractiveness to the employee in our 
estimation. Such an Association as this with a board of 
managers elected from the employees should be able to 
handle its own affairs with some slight regulations proposed 
by the management that would prevent its getting into the 
hands of an irresponsible board. 

One company gave as its opinion that the extent to which 
management should participate in conducting the affairs of 
the association depends upon “the education and mentality 
of the employees.” Management should simply see that the 
association is conducted on sound financial lines. It should 
always be willing to cooperate with and advise the officers of 
the association whenever such cooperation and advice is re¬ 
quested. 

A Pennsylvania shipbuilding company did not think it 
advisable for management to participate in the conduct of an 
association because of the distrust that labor often exhibits 
toward capital in the operation of welfare projects. 

Administration by Members Only 

The experience of an Ohio company with its employees* 
mutual benefit association, covering a period of over twenty-five 
years, has convinced it that the association should be managed 
entirely by the members. 

“The Association has been in existence now for over a 
quarter of a century. The first ten years of its existence 
were not very successful in the way of securing the support 
of a large per cent of our co-workers; but fifteen years ago 
we reorganized and threw the management entirely into 
the hands of employees. Prior to that time it had been 
largely managed by the officials of the company. Experi¬ 
ence taught us that for officials of the company to have 
any part in the management was not a good thing. The 
management used to offer bonuses, partial payment of dues, 
and other inducements, but none of these had sufficiently 
strong pulling power to get the interest of the men. Upon 
the reorganization when all of the responsibility of manage¬ 
ment was placed upon the men themselves, the Association 
began to take on new life.” 


100 


It is to be noted, however, that in this case the employees “are 
assisted in every way possible” by management. 

In another plant where the company contributes $2 per mem¬ 
ber, there is practically no company participation in the ad¬ 
ministration of the association. One of the company officials 
expressed himself strongly against management taking any part 
in the conduct of the association. The inevitable result, he said, 
would be to arouse suspicion and distrust on the part of the 
members. While the company was willing at all times to give 
its advice when requested, it was opposed to taking any share 
in the management of the association. That the company was 
interested, however, in seeing that the fund was efficiently and 
equitably administered is evidenced by its action in a situation 
that arose with regard to medical attendance for disabled mem¬ 
bers. The association, in addition to providing disability and 
death benefits for its members, furnishes them with medical 
attendance during their illness, paying a lump sum each year 
for the services of a physician. It was discovered that the 
physician was not performing his duty and was allowing mem¬ 
bers to remain away from work and draw benefits for a longer 
time than they were entitled to. Thereupon the company noti¬ 
fied the association that unless a change was made and a new 
physician obtained, its contribution of $2 per member would 
be discontinued. 

A New York furniture company reported that when manage¬ 
ment essayed to give advice to the officers of the association it 
met with a “tacit spirit of resentment.” It was this company's 
opinion that the less management takes part in the administra¬ 
tion of the association in the way of advice or assistance “the 
better for the association, and the deeper the interest the men, 
themselves, will take in it.” 

Company Representation on Governing Body 

In other concerns certain of the officers of the association are 
appointed by the company and a more direct interest is taken in 
the administration of the fund. The object of having officers 
appointed by the company on the governing body of the asso¬ 
ciation is to ensure stability. It is felt that better results are to 
be obtained by having a certain number of permanent members 
on the board of directors of an association than by having the 
personnel change at each election. The appointed officers also 

101 


exercise supervision over the conduct of the affairs of the asso¬ 
ciation. Under the constitution of one association the company 
appoints a superintendent, secretary and treasurer. It is stated 
that this plan of appointive officials “naturally results in a more 
business-like administration of the affairs of the association.” 

Another employer favored company representation on the 
governing body of an association, particularly if the company 
contributes to its support: 

“It is necessary to see that the constitution is rigidly ad¬ 
hered to and that moneys are well safeguarded, and with 
representatives of the management on the board of govern¬ 
ment proper advice can be given to employees with less 
experience.” 

In an Ohio plant the members of the association elect all the 
officers with the exception of the chairman, secretary and 
treasurer, who are appointed by the company. This is done in 
order to have these positions filled by men in whom the company 
has confidence. 

The management of a southern association is vested in a 
board composed of the foremen of the various departments of 
the factory, the superintendent of the factory being ex-officio a 
member of this board. 

One association is under the supervision of the relief depart¬ 
ment of the establishment, this department in turn being “in 
the executive charge of the general superintendent whose direc¬ 
tions in carrying out its regulations are to be complied with, 
subject to the control of the vice-president.” The establishment 
guarantees “the fulfillment of the obligations assumed by it 
in comformity with the regulations from time to time estab¬ 
lished.” It takes charge of the funds and is responsible for their 
safekeeping, and supplies the necessary facilities for conducting 
the business of the association. It also pays all operating ex¬ 
penses. The advisory committee of the association is composed 
of six association members, in addition to the general superin¬ 
tendent, who is ex-officio a member and chairman, and the 
cashier of the company, who is secretary of the committee. 

It is a common thing for the paymaster, cashier or treasurer 
of an establishment to be made treasurer of the mutual benefit 
association. The treasurer for one fund, for instance, is the 
paymaster of the establishment. This same fund has a board 
of seven directors, one of whom is named by the company. 

In several associations the officers are selected or appointed 

102 


indirectly by the establishment. In one fund the board of direc¬ 
tors is elected by fund members, and the officers in turn by the 
directors. The constitution of this association stipulates, how¬ 
ever, that “each director and officer of the association, shall, as 
a condition of eligibility to office be acceptable to and approved 
in writing by the company, and the name of each director or 
officer nominated shall be submitted to the company and ap¬ 
proved by the company before any such officer shall be eligible 
to election.” With regard to this provision, an officer of the 
company wrote the Board: 

“At no time has any name which has been submitted to 
the company been rejected. This requirement of the com¬ 
pany is purely a precautionary measure to prevent any per¬ 
son of wrong moral character obtaining a seat on the board 
of directors and is in no way a precaution taken by the com¬ 
pany as a means of dictating the policy of the association 
. . . the only supervision that the company exercises over the 
mutual benefit association is for its protection. The mutual 
benefit association adjusts all its claims, makes its own 
rates of dues and is run entirely by its board of directors.” 

It is generally acknowledged that the secretary or treasurer 
or whatever officer handles the funds of the association, has one 
of the most responsible positions in the organization. The 
Board’s investigation has shown that the members of an asso¬ 
ciation are frequently only too glad to avail themselves of an 
offer on the part of the establishment to allow the company 
paymaster, cashier or treasurer to act as the association treasurer 
or secretary. The establishment, on the other hand, particu¬ 
larly if it contributes to the fund, naturally desires to know that 
the financial affairs of the association are being conducted on a 
business basis, and the appointment of a company officer in 
those circumstances seems logical. 

One society studied follows voluntarily the policy of electing 
to its board of managers only men who have reached the rank 
of foreman or superintendent in the establishment. The 
association constitution stipulates, also, that one member of 
the board shall be the head of the company bureau of safety and 
welfare. This policy is the result of a conviction on the part of 
the association members that men occupying such positions as 
those designated are better qualified to formulate the policies 
and guide the affairs of the association and that they command 
greater confidence than would the rank and file of association 
members. 


103 


Complete Company Control 
A western corporation has mutual benefit associations in 
several of its plants. Membership in the associations is com¬ 
pulsory. After fourteen years’ experience, it is the corporation’s 
opinion that employees will have greater confidence in an asso¬ 
ciation managed by the company than in one managed by fellow 
employees. The company says: 

“Of course this opinion is based on the knowledge that 
we have been absolutely just and fair in the handling of the 
plan and charge nothing against the fund for such service. 

We believe it fair for industry to assume part of the cost 
of the Sick Benefit Fund. We believe it necessary to man¬ 
age, and it is hardly fair to manage without contributing 
something toward the Fund. It is also necessary to have some 
centralized control of the selection and handling of the doc¬ 
tors. This can be much better done by management than 
by employees.” 

General Opinion on Company Control 
There appear, therefore, to be three groups of opinions as to 
the extent to which a company should participate in the conduct 
of a mutual benefit association. These may be indicated in the 
following way: complete control by the company; representa¬ 
tion of the company on the governing body of the association, 
particularly where the company contributes in a financial way 
to the fund; participation in administration only to the extent of 
a willingness to aid and counsel with the employee officers when 
requested. It is to be noted that the method of complete control 
by the company was advocated by only one firm. In this 
association membership is compulsory. 

The weight of opinion of employers is apparently in favor of 
delegating to the employees as much responsibility as they can 
assume, consistent with the successful operation of an associa¬ 
tion. In a fund where the company contributes a certain amount 
of money, management undoubtedly has a claim to such super¬ 
vision of the fund as will ensure a businesslike and equitable 
administration of it. The method adopted to secure this end 
does not seem to be important. It may be gained either through 
representation on the board of directors of the association or 
merely by guidance and advice without official representation. 
Paternalism should be avoided, but cooperation sought after 
and encouraged. 


104 


VII 


BENEFITS 

The benefits commonly paid by mutual benefit associations 
are for temporary disability, due either to sickness or accident, 
and for death of members. The following table shows the num¬ 
ber of associations paying various kinds of benefits among those 
covered in this study. 


Sickness, accident and death. 307 

Sickness and accident only. 49 

Sickness and death only. 15 

Sickness only. 4 

Accident only. 1 

Death only. 5 

Accident and death only. 1 


382 

One association pays an unemployment benefit to its mem¬ 
bers. Twelve associations pay for the loss of a limb or limbs 
and for the loss of sight of one or both eyes. The benefit ranges 
in amount from $25 for the loss of one limb or the sight of one 
eye to $4000 for the loss of two limbs or the sight of both eyes. 
The benefits usually paid for such disabilities are $50 and $200 
respectively. 

Six associations pay a lump sum in lieu of weekly temporary 
disability benefits. This sum may be either the maximum 
amount of temporary disability benefits stipulated by the con¬ 
stitution of the association or else an amount agreed upon by 
the member and the association. One association in which 
this was the practice stated that the payment of a lump sum 
to members at the beginning of their disability enabled them 
to obtain hospital treatment which they would otherwise not 
have been in a position to secure. Another advantage of this 
method was said to be that the money paid members in such 
cases enabled them to move to another part of the country and 
secure employment which their disability did not prevent. 

Temporary Disability Benefits 

Temporary disability benefits are benefits paid over a specified 
period to members of associations who are temporarily in- 

105 









capacitated. They are generally paid for both sickness and 
accident, but in some funds they are paid for sickness only, and 
in others for accident only. There may be a distinction between 
the time benefits are paid for compensable and non-compensable 
accidents. Some funds do not provide payment for compensable 
accidents which are taken care of either by a workmen’s com¬ 
pensation act or by some separate insurance scheme; other 
funds pay for both compensable and non-compensable accidents. 
In the latter case benefits for compensable accidents may be 
paid only for the period prior to the time when payments are 
made under the workmen’s compensation act. In some cases 
where the schedule of benefits paid by the association is greater 
than the amounts payable under the workmen’s compensation 
act, the association may pay only the difference between the two. 

The amount paid in weekly benefits for temporary disability 
varies greatly in the associations. The lowest benefit paid 
among the associations studied is $2.50 a week, the highest $40 
a week. The predominant weekly rates are $5 and $6. The 
amount of benefits that can be paid by an association depends, 
of course, upon the rate of dues. Another important factor is 
the length of the waiting period. 

Adequacy of Benefits 

The Board has found that a number of associations in which 
the disability benefits are $5 or $6 a week consider such an 
amount an inadequate sum under the present cost of living 
scale. In many cases the schedule of benefits was drawn up 
ten or fifteen years ago when the workers were not only receiving 
lower wages but when the cost of living was less than it is today. 
One dollar a day was at that time considered sufficient for a 
provident worker to support himself and family during the time 
he was unable to work. The decrease in the purchasing power 
of the dollar has been such during recent years, however, that 
the associations feel that a larger weekly benefit should be paid. 

This is particularly true of those funds which do not provide 
free medical attendance. Members of associations in which the 
disability benefits are $5 or $6 a week stated that medical 
attendance very often alone cost them that much. 

The plan of contributory life and disability insurance of a 
Connecticut plant is of interest in this connection. The benefits 
paid by the mutual benefit association are $7 a week for eleven 

106 


weeks for cases of sickness and accident, with a waiting period of 
one week, and $100 death benefit. For the last three or four 
years the company has provided its employees with free life 
insurance under a group contract with an insurance company. 
It was found that this was not only expensive but was not gen¬ 
erally appreciated by the employees. The plan was accordingly 
revised and put on a contributory basis. It now includes life 
and disability insurance and employees who subscribe to the 
plan pay $.25 a week. The new schedule of benefits for disability 
for employees who are members of the association and who 
have been in the service of the company for one year are $7 a 
week paid by the benefit association for eleven weeks plus $5 a 
week paid by the insurance company. Commencing with the 
twelfth week and continuing for a maximum of fifty-two weeks 
a weekly benefit of $12 is paid by the insurance company. The 
life insurance provided ranges from $500 for employees of one 
year’s service, with an increase of $100 for each year of continued 
service to a maximum of $1000. One of the reasons given by 
the company in announcing the revised plan was: 

“Certain recent occurrences of disability due to accident 
and disease have proved to us the inadequacy of the bene¬ 
fits provided by the Mutual Benefit Association for reliev¬ 
ing financial distress.” 

Relation of Benefits to Wages 

The amount of benefit that should be paid is closely connected 
with the amount of wages and the standard of living. Recogni¬ 
tion of this fact is made by those associations in which member¬ 
ship is so graded that the amount of benefits a member may 
receive is proportionate to his regular weekly or monthly wage. 

Where the amount of insurance that may be carried is limited 
to a certain percentage of a member’s average wages, this is 
done in order that there may be no inducement for a member to 
remain on the sick list when he is able to return to work. One 
association prohibits a member from joining a class in which 
the benefits are more than 80% of his wages. In others mem¬ 
bers are not allowed to carry benefits which amount to more 
than 50%, 60% and 75% of the average weekly or monthly 
wages. According to the constitution of one association, mem¬ 
bers cannot insure themselves for more than $10 weekly benefit 
nor can they carry more than the amount of their average weekly 
wages for the previous three months. 

107 


The experience of one association in a middle western estab¬ 
lishment shows that employees themselves prefer benefits which 
are from 50% to 60% of their wages. 

The association in a Pennsylvania electric company pays 
50% of a member’s regular wages for ten weeks in case of sick¬ 
ness. In case of a compensable accident the member receives a 
sum equal to the full amount of his regular wages for the first 
fourteen days. Beginning with the fifteenth day of disability, 
the amount payable to the member by the association is equal 
to the difference between the amount to which the member is 
entitled under the Workmen’s Compensation Act of Pennsyl¬ 
vania and his full regular wages. In case of non-compensable 
accident the disabled member receives an amount equal to his 
full regular wage for ten weeks. 

All employee members of the association in a Pennsylvania 
publishing plant who are earning up to $40 a week receive their 
full weekly wages in case of sickness or non-compensable acci¬ 
dents. The association pays one-half the regular weekly wages 
in benefits, and these are increased 100% by the company. In 
thus increasing the sick and disability benefits of the association, 
the company insisted “that the business of the association be 
properly transacted, as the same may affect every case in which 
benefits are paid” and reserved the right “to withhold payment 
when not satisfied that benefits are justly due.” 

Benefits are paid for ten weeks in a year. In view of the fact 
that a disabled member receives his full wages during the time 
of his disability, it is interesting to note that the company be¬ 
lieves there is “very little ‘soldiering’ in order to draw benefits.” 
The management expressed itself as “thoroughly satisfied” with 
the operation of the association. 

Relation of Benefits to Other Insurance 

Another factor that is sometimes considered in regulating 
the amount of benefits payable by an association is the amount 
of insurance a member may be carrying with other organiza¬ 
tions. Thus one association, in outlining the benefits which a 
member may elect to choose, states that “no member shall re¬ 
ceive from all sources temporary disability benefits in excess of 
90% of his average wages for the three months preceding 
disability.” 

The following clause in the constitution of one association 


108 


outlines what a member must do if the total benefits received 
from the association and outside organizations exceed his regu¬ 
lar wage: 

“A member shall not receive from this and other sources 
benefits and insurance which in total equal or exceed his 
regular wage. In such case he shall arrange for a reduction 
among his insurers of benefits, or this Society may reduce its 
benefits until his income from such sources shall not exceed 
90% of his wage.” 

In another association, if a member is receiving ‘‘financial 
relief or assistance approximating 50% or more of his (or her) 
wage” through channels other than those of the association, 
the sick benefit payable by the association is one-half the usual 
amount. 

The association in a western plant, in case a member carries 
other sickness insurance making a total indemnity in excess of 
his regular wages, pays only such proportion of the regular 
benefits as his regular wages bear to the total indemnity. 

In associations where there is no restriction as to the amount 
of benefits payable in case members are carrying outside insur¬ 
ance, reliance for the elimination of malingering is apparently 
placed on the supervision of beneficiaries by either the associa¬ 
tion physician or a visiting committee. Experience shows this 
preferable to a flat limitation of benefits. If disability insurance 
is a valuable asset for a worker, no distinction need be made 
between the insurance he may be already carrying and that 
offered by the benefit association. The fact that he can retain 
his insurance in fraternal or other outside beneficial associations 
when he leaves the company’s employ is doubtless a feature that 
makes considerable appeal to the worker. The man who is 
carrying industrial or other additional insurance is to be en¬ 
couraged rather than handicapped. The association should, 
however, make certain that as far as its payments to the dis¬ 
abled member are concerned, they are continued only as long as 
he is entitled, according to reliable medical opinion, to receive 
them. This may be taken care of by having a clause in the 
application blank placing final authority as to the payment and 
discontinuance of benefits in the hands of the governing body 
of the association, who should be guided by the report of a 
physician. The association may limit the benefits payable by 
it to a certain percentage of the member’s wages, but it is ques¬ 
tionable whether it is advisable to penalize a man who has been 

109 


provident enough to carry and pay for insurance in other bene¬ 
ficial organizations. 

Term for Which Benefits Are Paid 

A large majority of the funds pay benefits for temporary 
disability due to sickness or accident during a single specified 
period only, either for each disability or for all disabilities. 
Where the total of all disability payments is limited to a certain 
number of weeks in a year, thirteen weeks is the period most 
commonly adopted. Among the associations studied, the lowest 
number of weeks for which benefits are paid in a year is five. 
One association limits the amount of benefits a member may 
draw in a year to not more than ten weeks’ full pay. Another 
stipulates that “no member shall be entitled to benefits for a 
longer time than he or she has been a member of the association 
previous to date of sickness,” with a maximum of thirteen 
weeks. Where the amount of benefits paid is restricted to a 
certain number of weeks for each disability, thirteen and twenty- 
six weeks are the predominant periods. 

Where benefits are restricted both as to the number of pay¬ 
ments made in a year and for one disability, thirteen weeks is 
the ruling period for which benefits are paid for one disability 
and twenty-six weeks the limit for which benefits are payable 
in a year. 

Of the 382 funds studied, only seven provide for payment of 
benefits throughout the whole period of disability regardless of 
its length. In each of these the amount of benefit decreases as 
the time of disability is extended. Thus one association pays 
$7 a week for the first three months of disability, $3.50 a week 
for the second three months, and $1 a week for the remainder 
of the disability. In another case after a payment of $5 a week 
for thirteen weeks, followed by $3 a week for an additional 
thirteen weeks, the benefit is reduced to $2 a week during the 
remainder of the disability. One association in the case of per¬ 
manent disability provides its members with pensions varying 
according-to their wages and length of service with the company. 

Extension of Benefit Payments 

There is a considerable variety of regulations among asso¬ 
ciations regarding the eligibility of a member for further tem¬ 
porary disability benefits after he has drawn the maximum 

110 


number of weeks benefits payable either in a year or for one 
disability. A number of associations in which not more than 
thirteen weeks’ benefits are paid for one disability and not more 
than twenty-six weeks’ in a year, state that a member, after 
having drawn thirteen weeks’ benefits, must work at least four 
weeks before he is entitled to another temporary disability 
benefit for sickness. Other associations in which not more than 
thirteen weeks’ benefits are paid in a year have the following 
clause in their constitutions: 

. “If the sickness or disability of any member of this asso¬ 
ciation shall continue for more than one calendar year and 
the member shall have drawn benefits for the full term of 
thirteen weeks on account of such sickness or disability, he 
shall not be entitled to draw benefits again until he shall 
have been at work for a period of four weeks.” 

One association in which benefits are paid for seventeen weeks 
stipulates that a member, after having drawn benefits for the 
full term of seventeen weeks, shall not be entitled to further 
benefits until one year has elapsed from the last payment by 
reason of the first sickness, during which period the member 
must actually have worked in the plant and paid the regular 
dues and assessments. 

Another association provides that, after having received the 
full amount of disability benefits payable in a year, a member 
shall not be entitled to further benefits unless he or she has 
been at work at least sixty days after the termination of the year. 

Some associations provide that, after having drawn benefits 
for the maximum period for which they are payable, a member 
is not entitled to further benefits till a period of time equal to 
that during which he drew benefits shall have elapsed. 

In one association a member, after having drawn full tem¬ 
porary disability benefits, must work thirty days before he is 
entitled to further benefits. If the member is disabled by 
accident, however, he is immediately entitled to another period 
of disability benefits. 

Continuation of Disability 

Where there is a specified number of weeks for which benefits 
are payable for one disability, or where there is a distinction made 
between the number of weeks during which benefits are paid 
in a year and the number of weeks they are paid for one dis¬ 
ability, it is necessary that definite rules be laid down as to 

111 


what constitutes the continuation of a disability. If benefits 
are paid only for thirteen weeks for one disability and only for 
twenty-six weeks in a year, it is of importance to know whether 
one disability following another is to be considered as part of 
the first disability, in which case benefits covering both dis¬ 
abilities would not exceed thirteen weeks; or whether the second 
disability is to be considered as a separate disability, in which 
case the member would be entitled to benefits for the second 
disability alone for a period of thirteen weeks. A number of 
associations have a provision in their constitutions to the effect 
that disability beginning less than four weeks after a previous 
disability is considered as part of the former disability unless 
there is positive evidence to the contrary. Benefits are then 
paid only for such length of time as added to the previous dis¬ 
ability makes up the prescribed maximum number of weeks for 
which benefits are payable for one disability. The difference 
between regarding such a second disability as a continuation of 
the first one and that of regarding it as a separate disability 
may be easily appreciated from the following illustration: “A,” 
after having drawn eight weeks’ disability benefits in an asso¬ 
ciation in which thirteen is the maximum number of weeks for 
which benefits are payable for one disability, returns to work, 
but after working a fortnight is obliged to quit on account of 
illness again. Under the provision that his second disability, 
which took place within four weeks of his return to work, is a 
continuation of the first disability, “A” is entitled to only five 
weeks’ benefits. If his second disability occurs after he has 
worked more than four weeks he is entitled to receive thirteen 
weeks’ benefits for it, if the number of weeks’ benefits payable 
in a year is greater than that payable for one disability. If, 
however, the number of weeks’ benefits payable in a year is 
the same as that payable for one disability, the question of the 
continuation of a disability does not arise. 

One association which pays thirteen weeks’ benefits for one 
disability and eighteen weeks’ benefits in a year provides that 
that if one disability follows another within a week, the second 
disability is to be considered a continuation of the first. Bene¬ 
fits are then paid for the second disability for only such number 
of weeks as, added to those for which the member was paid for 
the first disability, make up thirteen weeks. 

In another association, if the second disability does not occur 
112 


within one week from the time the member returns to work, he 
has to wait one month before he is entitled to further benefit’s. 
In this association benefits are not payable for more than 
twenty-six weeks in a year. The total number of weeks’ benefits 
which a member may obtain, however, is not affected by whether 
or not his second disability occurs within a week from the time 
he returns to work. 

Another association has a similar provision whereby an em¬ 
ployee who has been disabled and returns to work for more than 
a week cannot draw further benefits until the expiration of a 
period equal to the time he was on the sick list. If, on resuming 
after being disabled, he works for less than a week, he is again 
placed on the sick list and may continue to draw benefits up 
to forty weeks, which is the limit for which temporary disability 
benefits are payable in the year. 

A number of associations do not specify any period during 
which a second disability must occur in order for it to be con¬ 
sidered as a relapse and a part of the original disability. The 
decision as to whether any disability shall be considered a 
relapse or an original disability is made by the medical director 
or the association physician, whose decision is final. 

Death Benefits 

Of the 382 associations investigated, 328 pay a death benefit. 
This ranges from $12.50 to $5,000. The most common death 
benefits are $50 and $100. 

In ten of the associations the amount of the death benefit 
varies according to the number of members, each member being 
assessed a certain amount. Four associations pay death benefits 
only. Death benefits are paid to members’ dependents in forty- 
seven associations, the amount of the benefit varying from $10 
to $200. In two associations death benefits are paid in case of 
the death of a dependent member of the association member’s 
immediate family, but not in the event of the death of the mem¬ 
ber himself. 

Some associations make a distinction between a death bene^ 
fit and a funeral benefit. In a number of associations a part of 
the death benefit may be withheld by the association and used 
to pay for an undertaker’s services. An eastern steel plant in 
which this is done was convinced that a great saving was affected 

113 


in this way for the employee’s family. The company has an 
arrangement with the undertakers in the town by which, in con¬ 
sideration of an equitable distribution of the funerals of members 
of the association, a standard rate is charged for funeral expenses. 
This method is reported to have reduced the funeral costs to 
the families of members. In a few instances the association, 
in addition to paying a death benefit, provides a coach for the 
funeral. Flowers to the value of $5 or $10 may also be sent to 
the member’s beneficiaries. 

Where the death benefit paid by the association is in the form 
of group insurance, a member on leaving the firm may usually 
have the policy converted into a policy of life insurance in any 
one of the forms customarily issued by the insurance company, 
except term insurance, in an amount equal to the amount of his 
protection under the group insurance policy at the time of the 
termination of his employment. Conversion has to be made 
within a certain length of time, usually thirty-one days, but no 
medical examination is necessary. The premium on such con¬ 
verted policy is that applicable to the class of risks to which the 
member belongs and to the form and amount of the policy at 
his attained age. One association which covers all of the local 
industries in a middle western city has an agreement with the 
insurance company which carries its group life insurance, where¬ 
by a member who leaves the employ of any of the local indus¬ 
tries may continue to carry his policy on the annual term basis. 

Among the various factors which affect the amount of the 
death benefit paid by associations are the length of membership 
of the deceased member, the amount of money in the treasury, 
the number of members in the association, the marital condition 
of the deceased member, and his age at the time he joined the 
association. In one instance the amount of the benefit is left 
to the discretion of the board of directors. 

Payment of Death Benefit after Full Disability Benefits 

Some associations do not have any constitutional provisions 
covering a member’s eligibility to death benefits after he has 
drawn a full period of temporary disability benefits. A number 
of associations, however, do not pay death benefits under these 
circumstances unless the death occurs within a certain period 
after the last payment for disability benefits. This period varies 
from two weeks from the time the last payment was made to 

114 


two years from the beginning of the disability. Several associa¬ 
tions pay a death benefit to a member who had drawn disability 
benefits for the maximum period and who was still disabled, only 
if his death occurred within one year from the time of the first 
payment of temporary disability benefits. During that year 
he must have been wholly disabled, and have had a physician 
in constant attendance upon him during the entire period. 
Others require that the member be wholly disabled during a year 
from the time of the payment of his first disability benefit, and 
if death occurs within that time a death benefit from which all 
unpaid dues are deducted is paid his beneficiary. 

One association, which pays temporary disability benefits for 
not more than thirteen weeks in a year, does not pay a death 
benefit in the case of a member who has drawn thirteen weeks’ 
temporary disability benefits unless his death occurs within two 
weeks of his last disability benefit payment. 

The association in an Ohio machinery plant pays one-half 
the regular death benefit to the beneficiary of a member who has 
drawn temporary disability benefits for thirteen weeks, which 
is the maximum period. 

Other associations allow a member to remain eligible for 
death benefits for a certain period after drawing full temporary 
disability benefits, and if the member is still disabled at the 
expiration of that time he may continue the right to a death 
benefit by paying certain dues. One association does not allow 
a member to retain his title to death benefit for any length of 
time without the payment of dues after he has received the 
maximum amount of temporary disability benefit. 

A few associations, on the other hand, allow members who 
are still disabled after having drawn full disability benefits to 
retain their death benefit privileges without payment of dues 
as long as they are disabled. They must, however, report to 
the association fortnightly. 

Contestability of Death Claims 

In most associations the conditions which contribute to the 
forfeiture of sick or disability benefits apply also to death bene¬ 
fits. A great many funds stipulate the conditions under which 
sick and accident benefits are forfeited, but in many cases no 
specific reference is made in this regard to death benefits. 

Experience of associations in handling death benefits indicates 
115 


that this is a point on which every constitution should be specific 
and on which members should not be in doubt. There may be 
extenuating circumstances which would warrant modifying or 
waiving such provisions in individual cases, but, in general, 
the regulations covering forfeiture of death benefits should be 
clearly set forth and it should be understood that they are to 
be rigidly enforced. Almost all associations having restrictions 
covering the forfeiture of benefits provide for notice to members 
of delinquencies such as arrears, misconduct or failure to follow 
the rules and regulations of the society in any particular. It is 
desirable that a member should be given an opportunity to 
adjust any difficulties which might debar his dependents from 
benefits in case of his death. 

Execution of Release or Waiver 
A few associations require members to execute a release or 
waiver relieving the company from the payment of any sum 
over and above the benefits to which they would be entitled 
from the association, in case of injury, disability or death from 
accident. This in effect is a release of the establishment from 
all claims on the part of an employee for damages arising from 
death or injury while in the employ of the company, and by 
signing such release the association member forfeits all rights to 
benefits from the association if he brings suit for damages against 
the company. For instance the constitution of a New York 
association contains the following provision: 

“As a condition precedent to receiving or being entitled 
to receive any death or disability benefit from this Depart¬ 
ment, the person receiving or otherwise entitled to receive 
the same must execute a release of the Company from any 
and all liability for such death or disability other than under 
the provisions and regulations of this Department. The 
payment of any sum to or for the benefit of such person, 
whether before or after judgment, on account of any such 
actual or alleged other liability shall exclude such person 
from benefit for such death or disability under the provisions 
and regulations of this Department; and if suit is brought 
to enforce any such alleged other liability, no such benefit 
will be payable until such suit is discontinued or is finally 
decided in favor of the Company.” 

In general it may be said that such releases are permitted 
under the laws of most states, except as they may be affected 
by employer’s liability, workmen’s compensation and similar 
legislation. Where acts such as those mentioned enter in, 

116 


waivers may cover benefits derivable from the mutual benefit 
association, but no waiver can negative the benefits under 
workmen’s compensation or acts of a similar character. 

No attempt is made in this report to discuss in detail the legal 
aspect of the waiver. The laws of different states relating to 
the waiver differ. Before a waiver is adopted by any associa¬ 
tion it is advisable that competent counsel be consulted as to 
its legality in the particular state, and the results likely to follow 
its adoption. 

Medical Attendance 
Free Medical Attendance 

In addition to cash benefits for temporary disability and 
death, 46 of the 382 associations studied provide their members 
with free medical attendance during disability. This may be 
rendered by the company doctor and be confined to treatment 
at the plant or, where the association pays for the services of a 
physician, he may be required to visit the members in their 
homes and render medical treatment there. These figures in¬ 
clude associations which bear a certain amount of hospital or 
surgical expense as well. 

It is probable that in a great many more of the associations 
medical service is provided by the plants themselves. Such 
service is likely to be available for all employees irrespective of 
their membership in the association and therefore cannot be 
regarded as one of the benefits provided by the association for 
its members. 

Where an association has a physician it is not compulsory for 
members to be attended by him. However, if the member se¬ 
cures his own physician the association does not pay for such 
services. In some cases it is required that the association phy¬ 
sician ratify the member’s choice of a doctor to attend him 
during his illness. 

The duties of the association physician are usually as follows: 
to examine all applicants for membership; to give full medical 
attention in all cases of accident, sickness or death of members; 
to make a prescribed minimum number of visits upon the 
members during disability; and to determine when a disabled 
member is fit to return to work. In associations where a certain 
amount of hospital or operation expenses are paid, payments 
are made only on the recommendation and certificate of the 
association physician. 


117 


A packing company which has associations in several plants 
furnishes free the services of its medical department. In 
those of its plants in which there is no medical department, 
members of the association are entitled to an allowance for 
medical treatment or service not to exceed $2.50 per week 
“when expended, and proper receipt thereof is given, for a period 
not exceeding twenty weeks in any twelve months.” This is in 
addition to a disability benefit of $7.50 a week. Another asso¬ 
ciation adds to its weekly benefit one-third of the amount to 
be used by the disabled member in paying “for such nursing and 
medical attendance as may be necessary to aid his early re¬ 
covery.” 

Assumption of Hospital Expenses 

Several associations assume a certain amount of hospital 
expenses in the event of a member having to undergo an opera¬ 
tion or other treatment that necessitates his removal to a 
hospital. Payment of hospital expenses and operation fees 
may be made dependent upon a certain length of membership 
in the association. Some associations pay for medical, surgical, 
or hospital services only in the case of non-industrial accident 
injury. In the case of one association in which this is done, 
not more than $100 may be paid for any one disability. 

The association in a middle western plant, in addition to 
providing members with the services of a physician, pays hospi¬ 
tal expenses up to eight weeks, assumes $25 of the expenses 
necessary for the services of a specialist and gives free to each 
member two X-ray examinations for injuries or sickness not 
caused by accidents covered by the state compensation law. 

Dental and Other Service 

Dental benefits are provided by one association. Members 
of six months’ good standing are entitled to annual financial 
assistance on their dental bills to the extent of $25. Such 
dentistry must have the approval of the company dentist 
before it is done. 

Expenses of tonsil and adenoid operations to its members 
and dependents are assumed by one association. The opera¬ 
tions are limited to two for any one member and his dependents 
during any one year. 

Three associations, instead of paying a weekly cash benefit 
in case of temporary disability, pay all or a portion of doctor’s 

118 


or hospital bills within certain prescribed limits. No weekly 
benefits are paid by one association unless the member has paid 
three months’ dues, but he is entitled to the services of the 
association physician immediately upon joining. Two associa¬ 
tions provide their members with the services of a private insti¬ 
tution giving periodical medical examinations. 

A few associations provide treatment for those of their 
members who develop tuberculosis. One association pays full 
wages for a year to a member who, after a membership of five 
years, contracts tuberculosis. This is conditional upon the 
member placing himself promptly under such medical treatment 
and curative surroundings as the plant doctor suggests or 
approves of. 

Preventive Medical Work 

In most associations it is the physician’s function to see that 
a member who is disabled and drawing benefits be cured as soon 
as possible and taken off the sick list. In only two associations 
was there found any appreciation of the prophylactic value of 
medical treatment as contrasted with its palliative or curative 
value. In one of these it is the association physician’s duty, 
in addition to taking care of disabled members, to visit the 
plant every morning where he is available for consultation by 
any member of the association. In the other case the “general 
function” of the physician is “to keep the members well as far 
as practical, rather than merely to minister to the sick and 
injured.” He examines all applicants for membership, at which 
time it is his duty by advice “to improve their state of health” 
whether they become members or not. 

Both from the humanitarian and the economic viewpoints 
medical attendance and treatment for disabled members are 
advisable. The importance of such treatment for the disabled 
members themselves is obvious. In many associations the rate 
of benefit is so small that competent medical advice and treat¬ 
ment are rendered prohibitive to members. The serious con¬ 
sequences which may result from imperfect or erroneous diag¬ 
noses and treatment by physicians of doubtful standing should 
be guarded against by an association, not only from the view¬ 
point of the welfare of the members themselves but also because 
of the continued strain such maltreatment of members may have 
upon the financial standing of the association itself. A dis¬ 
ability that under timely and proper treatment may be cured in 

119 


a short time may otherwise develop into a permanent disability. 
The association owes it both to itself and to its members to 
prevent such a situation arising. 

Where employees express opposition to the policy of having a 
certain doctor as the association physician for whose treatment 
alone the association will pay, or where employees prefer cash 
benefits alone, the formation of an association should not on 
that account be abandoned. Cash benefits are better than no 
protection against disability, although a smaller cash benefit in 
conjunction with free and proper medical treatment during dis¬ 
ability is undoubtedly of greater value to a disabled employee 
than a larger cash benefit without proper medical care. Local 
circumstances may be such that only the cash benefits may be 
feasible at the time of initiating the association. The provision 
of medical treatment, however, is one of the ways in which the 
association may render fuller service to its members. When it 
has become well established financially and the question of giv¬ 
ing the members increased benefits arises, this phase of the sub¬ 
ject should receive the fullest consideration of the governing 
body and of the membership. 

Up to the present time the mutual benefit association has been 
chiefly an organization for providing financial assistance for 
employees when disabled. Of late years an increasing number 
of associations have come to recognize the importance of com¬ 
petent medical attendance and treatment during disability. 
A few associations are now developing what is undoubtedly a 
most important and significant feature of their work—that of 
preventive or corrective medicine. It would seem that such 
activity may be an important future development of the work 
of mutual benefit associations: 

This development is parallel with the change that has taken 
place, in recent years, in the conception of the position of the 
industrial physician. Regarded at first as one whose duty it was 
to look after the sick and injured in industry, it is now generally 
recognized that his task is to prevent and reduce to a minimum 
sickness and injury within the plant. Where the industrial 
physician has directed his efforts to such ends, compensation 
costs and labor turnover have been reduced and production 
has benefited thereby. This is because 

“. . . a person of healthy mind and body views his surround¬ 
ings and associations differently from one affected by ill- 

120 


ness or dissatisfaction, and a contented and healthy worker 
can produce more and better than a dissatisfied and sick 
employee. The true industrial physician today accepts this 
as one of his guiding principles.” 1 

Although the change in the conception of benefit associations 
has not developed as yet to the same extent as in the case of the 
physician in industry, the same facts which compelled a revision 
of the position of the industrial physician indubitably point to a 
similar revision in the case of the benefit association. From the 
humanitarian viewpoint it is certainly better to teach a man 
how to prevent illness and accidents than merely to take care 
of him after the event. A healthy employee is of more value 
both to himself and to industry than one who is ill or injured. 
From the economic standpoint an association would undoubted¬ 
ly find, as in the case of industry itself, that it pays to expend 
more time and attention in eliminating the causes of illness 
and injuries than in taking care of employees who have suffered 
disabilities. 

Both human and economic considerations therefore lend their 
support to the view that one of the more important primary 
functions of a mutual benefit association may be to assist its 
members in avoiding disabilities rather than merely to aid them 
after they became disabled. 

Physical Examination on Entrance to Association 

The first step in this direction is physical examination of all 
applicants for membership. This is done by 86 of the 382 asso¬ 
ciations studied. Twenty-eight associations reserve the right 
to require a medical examination of applicants if the board of 
directors or trustees consider it advisable to do so. Several 
associations require medical examinations for applicants over 
a certain age, usually forty-five or fifty years. Others require 
examinations in the case of women only. No data were obtained 
as to the number of firms in which medical examination was 
required upon entrance to employment, regardless of member¬ 
ship in a benefit association. 

By means of a physical examination an association can pro¬ 
tect itself against members who may have a chronic disease or 
other disability which would make such members a heavy 
charge upon it. A number of associations enable applicants 
National Industrial Conference Board, “Health Service in Industry,” Re¬ 
search Report No. 34, New York, January, 1921, p. 3. 

121 


for membership who may be subject to chronic disabilities to 
obtain a limited membership. The applicant is required to sign 
a waiver, exempting the association from liability for such 
disability. Thus one association states: 

“If any applicant for membership or for change in mem¬ 
bership has physical defects which would preclude the ap¬ 
proval of his application, if presented unconditionally, his 
application may nevertheless be approved; provided that 
he executes an agreement in writing, satisfactory to the 
Manager, to the effect that he shall not be entitled under 
his membership to any benefits for disability caused by, 
arising from or growing out of such defects, such agreement 
to be attached to and to be made a part of his said applica¬ 
tion. 

The effect of such a provision is to protect the association, 
but at the same time it penalizes the applicant. Apparently 
nothing is done to help the unfortunate employee to remedy his 
defect. The only thing accomplished is that he is prevented 
from becoming an undue charge upon the association. While 
this is necessary in order that its financial standing be safe¬ 
guarded, the association may be shirking its responsibility to 
help such an employee to become physically fit. A physical 
examination which does nothing more than penalize the appli¬ 
cant for membership for certain defects that it reveals is not 
fulfilling its wider possibilities of service, which are to prevent 
the development of a pathological condition that may be shown 
to be imminent or, where possible, to correct and remedy a 
condition that has already developed. 

Where an applicant for membership in an association has an 
incurable disease, nothing more can be done than to allow him 
to hold a limited membership whereby he waives all claims for 
disability resulting from such disease. In all other cases where 
the disability from which the applicant is suffering is remediable, 
however, the benefit association might assist him in correcting 
his defect. If, for instance, a man has an incipient tuberculosis 
or kidney disease that is susceptible of cure through proper 
treatment, the association might offer him some inducement to 
obtain the medical treatment necessary to arrest the disease, 
instead of making him waive all claims for disability arising from 
it. Such inducement might be offered by his admission to full 
membership following such treatment. Where the employee is 
financially unable to pay for the whole of the necessary treat¬ 
ment the association might go farther and assume part of the 

122 


expense. The method of procedure is a question that would 
have to be worked out by each association. Those associations 
which have a savings and loan department might well utilize 
such funds for this purpose. Other associations which make 
provision in exceptional cases for assistance of disabled members 
beyond the usual amount of benefits could devote a part of such 
money to the treatment of members who have incipient diseases. 

Periodic Physical Examinations 

Three associations provide their members with an annual 
physical examination. In two of these this is done through a 
private organization specializing in such service. Periodic 
physical examinations are indispensable in any medical work 
of preventive nature. They would not only be of immense 
value to the members of mutual benefit associations through the 
disclosure of conditions that could be treated before they be¬ 
came actual disabilities, but the association itself would profit 
financially thereby. Preventive measures of the kind outlined 
would undoubtedly result in a decrease in the number who 
would become “beneficial” in the common meaning of the term, 
that is, placed on the sick or disability list. The association’s 
chief task would be to exercise care and scrutiny of its members 
in order to minimize sickness and accident as far as possible. 

Preventive Campaigns 

The large number of benefit associations in industry today is 
actual evidence of the fact that employees are convinced of the 
value of such organizations in affording them a certain amount 
of assistance in the event of their becoming disabled. It would 
not appear to be a difficult matter to show employees that the 
associations, through application of the principles of preventive 
medicine referred to above, can be of still greater benefit to 
them. The proposition that it is better to prevent disease 
where that is possible, than to allow it to develop and then try 
to cure it, appeals to common sense. Every association could 
draw from its own experience to prove that if the “ounce” of 
prevention had been applied in time the pound of cure 
would not have been necessary. No argument would be needed 
to convince the employee who has undergone several weeks 
preventible sickness that the association would be rendering him 
greater benefits if it had been able to detect and treat the disease 
before he had to quit work. 


123 


The association that is considering concentrating on preven¬ 
tive work would find the best salesmen for the idea among its 
own members who had received disability benefits. The results 
obtained in industry itself through emphasis upon removal of 
the causes for sickness and accidents rather than on mere care 
of the sick and injured could also be further used by an asso¬ 
ciation in educating its members to the value of preventive 
medical work. 

Relation of Plant Medical Department to Medical Work 
This change in the activities of a mutual benefit association to 
emphasize preventive medical work may be brought about 
either as an extension of the activities of the plant medical de¬ 
partment or as an association undertaking alone. While it is 
true that the plant physician has that intimate knowledge of 
shop conditions which the outside physician does not possess 
and which is necessary for a thorough appreciation of the 
significance of any illness that may develop, the psychological 
effect upon workers of a plant medical department sponsoring 
preventive medical treatment for members of an association 
must be considered. It might be that, where the company doctor 
took the leadership in inducing the association to examine its 
members periodically and to engage in other medical work of a 
prophylactic nature, the members would look upon it simply as 
a move on the company’s part to increase the efficiency of pro¬ 
duction and to obtain a more stabilized working force. This 
consideration would not arise were the members of the associa¬ 
tion on their own initiative to determine to engage their own 
physician to carry on preventive work, in the belief that such 
work would result in a greater service to themselves and at the 
same time cost them less. Under such circumstances the im¬ 
pelling motive in prompting the association to develop such 
work would be that of self-interest. The interest of the company 
in minimizing illness and accidents in order to improve produc¬ 
tive efficiency and reduce labor turnover would not enter as a 
factor which might prejudice workers against it. In plants 
where the company doctor is the association physician and 
where confidence has been established between the physician 
and the association, the difficulty referred to might not arise. 
Local conditions would determine the policy to be pursued in 
each case. 


124 


Whether the company doctor is chosen as the association 
physician or whether an outside doctor is selected, the company 
may render the association all possible assistance in its work. 
Where the association physician is not the plant doctor, the 
plant medical department may cooperate with the association 
physician and place at his disposal any information it may 
possess that would be of assistance to him in improving the 
health of the association members. Physical examination 
records should be inviolate between the physician and the 
examinee. It is the examiner’s duty to inform the company as 
to what work the employee may be unfitted for in the light of 
the facts revealed by the examination, but the facts themselves 
should be confidential between the physician and the member. 

Company Support in Medical Work 

While the question of company financial support for an asso¬ 
ciation engaging in preventive medical work is one that has to 
be determined by each individual firm, in a matter such as this, 
where the interest of the employer and employees are to such a 
large extent identical, it would seem that a company could well 
consider financial assistance in the support of such work. 
Employers who have medical departments will appreciate the 
worth of any move made voluntarily by the benefit association 
to reduce illness and accidents among its members. The inertia 
which often characterizes employees in their attitude toward 
health service in industry would be supplanted by enthusiasm 
based on a desire to protect themselves. The effect of such an 
incentive among employees would prove of inestimable value to 
the work of a medical department. Where a company has not 
been able to establish and operate a medical department, it 
should give every encouragement to the development of pre¬ 
ventive work by the mutual benefit association, as in this way 
the foundation of more extensive health service will be laid. 

Benefits for Members’ Dependents 
Only one association of the 382 studied pays benefits for 
illness in a member’s family. This association pays benefits in 
case of a birth in the family of a member. 

Fifty-one associations pay benefits in case of the death of 
certain members of a member’s family. In 29 of these the 
benefit is paid only upon the death of a member’s wife. The 

125 


amount of the benefit ranges from $25 to $300, the common 
amounts being $50 and $100. Seven associations pay a benefit 
in case of the death of a member’s wife or a dependent child. 
Five pay a benefit in case of the death of the member’s 
husband or wife. Others pay benefits in case of the death of 
either a member’s wife, husband, father, mother, brother, 
sister or dependent child. The amount of benefit commonly 
paid in case of the death of a dependent child is $25. The 
same amount as is paid in case of the death of a member’s 
wife is usually paid on the death of another of the member’s 
immediate adult family. 

Provision of benefits in case of the death of a member’s 
dependents necessarily entails a higher rate of dues than 
where benefits are confined to cases of disability and death 
among members alone. The association may not be willing to 
shoulder the additional expense involved, but it might afford 
members an opportunity to carry such extra benefits by the 
payment of the necessary additional dues. 

Length of Membership Required for Benefits 

Of the funds studied, 60% provide that members are eligible 
for benefits as soon as they join, while the remaining 40% 
require a specified length of membership varying from three 
days to one year before benefits may be drawn. The object of 
such a provision is to prevent employees from joining the 
association in order to obtain benefits for an illness which they 
feel is coming on, and to enable the officers to determine whether 
the new member is likely to become a permanent liability upon 
the association. 

Some associations require the same length of membership 
for participation in benefits for either sickness, accident or 
death. Others require a shorter term of membership for 
disability benefits than for death benefits. A number make the 
period of membership necessary for accident benefits shorter 
than that for sickness and some pay benefits for accidents oc¬ 
curring immediately after entrance to the association. Apart 
from the inclination that some employees may have to join 
the association merely to obtain benefits for some disease which 
they feel is about to develop, it is advisable to have such a 
period before members become eligible for sickness benefits, 
since even medical examination will not in all cases reveal 

126 


a pathological condition which is just developing and may 
within a short time become an acute disease. This period need 
not be so long in those associations in which medical examina¬ 
tion is required on entrance as in those in which this is not one 
of the requirements for entrance. 

No reason would seem to exist for making this period one 
year, as some associations have done. Such a long period is not 
justified on medical grounds, nor can it be maintained that 
one year is required by the officers of an association to deter¬ 
mine whether a member’s conduct is such that his membership 
should be canceled. The psychological effect of making a 
member pay dues for one year before he can receive benefits 
might easily be prejudicial to the association. Nothing is 
likely to shake the member’s confidence in an association so 
much as placing difficulties in the way of obtaining benefits. 

On the other hand, experience would indicate that pro¬ 
vision of a three-day period of membership before a member is 
entitled to benefits in case of accident is not of vital importance 
to an association. A Pennsylvania association in which a 
member cannot draw benefits for accidents until he has been 
a member for three days informed the Board that it did not 
think “the association would gain or lose were this article 
omitted” as it had not been used during the two years during 
which the association has been in operation. It is to be noted 
that physical examination is a requirement for entrance to 
this association. 

From the medical standpoint two weeks is probably a 
reasonable period of membership which an association may 
require of its members before they become entitled to benefits 
in case of sickness. During that time 95% of all contagious 
or infectious diseases would make themselves manifest. 

There is not the same reason for the postponement of benefits 
in case of accidents. An accident is not preceded by symptoms 
that may be detected after the lapse of a certain period. 
Neither do members join an association in order to obtain 
benefits for an anticipated accident. Benefits should therefore 
be paid for accidents occurring on the day the member joins the 
association. This is all the more important since compensation 
payments are not payable till the expiration of a certain waiting 
period varying from three days to two weeks in different states. 

A longer period of membership may justifiably be required 
127 


of members before they become entitled to benefits for death 
resulting from sickness. This is necessary for the protection of 
the association. On the other hand, the need of the deceased 
member’s family will be the same irrespective of whether he 
dies after being a member for one year or for one week. An 
actuarial investigation would have to be made in order to 
determine the cost to the association of paying death benefits 
irrespective of the length of membership. It would then be a 
question for each individual association to decide upon the 
policy to be pursued. 

Notification of Disability 

All associations require that a member who becomes 
disabled must notify either the secretary of the association or 
his foreman or department head within a certain time of the 
commencement of his disability. Various penalties are im¬ 
posed upon members who neglect to do this. A number of 
associations require that the secretary be notified immediately 
a member is disabled. Failure to do so may result in forfeiture 
of benefits. 

Other associations allow members a period of forty-eight 
hours within which notification of disability must be received. 
In one association, failure to do this may be considered just 
cause for forfeiting all right to sick benefits “during the time 
less forty-eight hours in which the Board of Managers shall 
have remained ignorant of the condition of the sick or dis¬ 
abled member” through his failure to report. 

The association in an eastern public utility corporation pays 
benefits beginning with the fourth day of sickness, “provided 
that notice of sickness has been given to the head of the 
member’s department at least twenty-four hours before the 
day on which sick benefit payment goes into effect.” In the 
event of notification later than the third day, the association 
reserves the right to begin sick benefit payments only from 
the day on which notification is actually received. 

Several other associations make three days the time within 
which notification of disability must be received in order that 
the duration of the disability may be computed from the 
day of its commencement. 

Other associations allow disabled members seven days in 
which to report disabilities. In some of these associations if a 

128 


disability is not reported within the specified time after its 
commencement, benefits are not payable till one week from 
the date of the receipt of notification; in others benefits are 
not payable till fourteen days from date of receipt of notifica¬ 
tion. Another practice that is followed by a number of associa¬ 
tions is the following: 

“Any member who is disabled on account of sickness or 
accident, and is not quarantined, must report his sickness or 
disability to the Secretary within seven days from the time it 
commenced. In case such sickness or disability is not so re¬ 
ported, benefits will only be paid from the date of the report.” 

The date of the receipt of notification by the secretary is 
taken by some associations as the beginning of the disability. 
Where this is the case it is obviously to the disabled member’s 
interest to report his disability immediately it commences. 
In one association benefits are paid for sickness beginning with 
the fourth day from the date of the receipt of notification by 
the secretary, while in the case of accident they are paid be¬ 
ginning with the date of the notification of the secretary. 
Where benefits are payable after a definite number of days 
following the receipt of notification by the association the 
members are prompted through self-interest to report dis¬ 
ability immediately. 

In one association in which benefits are not payable for time 
previous to notice of disability to the head of the department, 
post cards reminding them of this fact are sent to all members 
when they fail to report for work. Several of the association 
officials who were interviewed said that members were liable 
to forget to report to their department heads when they were 
disabled and this step was taken in order to protect them. 
The result was described as being very satisfactory. 

Restrictions for Certain Diseases or Conduct 

Nearly all associations reserve the right to withhold benefits 
in case the member (a) is in arrears in his dues; (b) is suffering 
from a disability the result of intemperance or immoral con¬ 
duct; (c) conducts himself in such a manner during his dis¬ 
ability as to aggravate it. 

Various periods are laid down by associations beyond which, 
if a member is in arrears in the payment of his dues, his mem¬ 
bership is terminated. In all cases, however, a member can- 

129 


not draw benefits for a disability occurring during a period in 
which he is in arrears. 

Nearly all associations stipulate that benefits shall not be 
paid for disabilities the result of intemperance or immoral 
conduct. Other grounds on which benefits may be excluded 
include: disability existing prior to membership; self-inflicted 
injuries; fighting; scuffling; cases brought about through care¬ 
lessness; violation of company rules; unlawful acts or mis¬ 
conduct; and cases where fraud or attempted fraud is evident. 

In one association benefits are not paid for disability 
“. . . to a member directly, indirectly or partly due to his 
intoxication, or to his use of alcoholic liquors as a beverage, or 
to his immoderate use of stimulants or narcotics, or to his 
unlawful acts or immoralities, or to venereal diseases (syphilis, 
gonorrhea, chancroids) however contracted or their complica¬ 
tions (orchitis, epididymitis, stricture or bubo); or for his dis¬ 
ability from fighting (unless in self-defense against unpro¬ 
voked assault) or from injury received in a liquor saloon, gam¬ 
bling house or any disreputable resort.” 

This association, however, allows a member who has such a 
non-beneficial disability to retain death benefits if he keeps the 
superintendent of the association informed of his address and 
furnishes monthly satisfactory evidence of continued dis¬ 
ability. After a continuous membership of five years benefits 
are paid “for all disability regardless of the cause thereof 
except that due to accident incurred while on duty.” 

Another association allows members incapacitated through 
a non-beneficial disability to retain death benefits for a period 
of six months, after which membership terminates. 

Certain restrictions are placed by most associations on 
members during the time they are drawing benefits. These are 
infinite in their variety. Some of the more common ones are: 
Members must not frequent saloons or gambling houses; 
they must not be out of the house after sunset; they must not 
leave the house without the consent of the sick committee; 
they must not engage in any gainful occupation or attend to 
any business, etc., etc. 

Supervision of Members While Drawing Benefits 

Some associations do not pay any disability benefits unless 
the disabled member procures a medical certificate showing 
the nature of his disability and forwards it to the association 
weekly, fortnightly or monthly, as the case may be. Other as- 

130 


sociations require medical certificates from disabled members 
only when the sick or visiting committee thinks necessary. A 
sick or visiting committee may be also utilized to supervise 
members receiving benefits in those associations in which 
medical certificates are regularly required from disabled 
members, although in a number of cases such committees 
are not considered necessary. In associations which have 
their own physicians, the right is reserved to have the dis¬ 
abled member examined by the association physician if there 
is any doubt in the sick committee’s mind as to the reliability 
of the member’s own physician. Members who refuse to be 
examined by the physician selected by the association forfeit 
all benefits. Benefits are also discontinued if a member re¬ 
fuses or neglects to follow the recommendations of such 
physician. 

In those associations in which membership is retainable on 
leaving the company, a doctor’s certificate is invariably re¬ 
quired from members living at a distance who become dis¬ 
abled. 

The sick or investigating committee of a benefit association 
is made up of a certain number of the members whose duty it 
is to visit regularly all disabled members and report to the 
association whether in their opinion such disabled members are 
entitled to receive benefits. The members of the committee do 
not receive any remuneration for their work, but their carfare 
expenses are usually paid. 

It is evident that the person most competent to determine 
whether a disabled member is malingering is a properly 
qualified physician. In view of the collusion that may exist 
between the disabled member and his family physician, the 
association wisely retains the right to employ a physician 
satisfactory to it in examining members who are drawing 
benefits. This is done not only to protect the association but 
also to protect the members against incompetent and un¬ 
scrupulous members of the medical profession. 

The experience of an eastern steel company illustrates the 
value, both to the association and the members, of this method 
of the supervision of disabled members. In this association it 
has been found that there must be some means of checking up 
the certificates obtained by members from local physicians. 
The company doctor is the final authority and benefits may be 

131 


refused a member if on examination the claim is found to be a 
false one, even if he has a local doctor’s certificate. As a con¬ 
sequence, benefit payments have been reduced to a very con¬ 
siderable extent and the cost to the association has been cor¬ 
respondingly reduced. This is not, however, the only result of 
re-examination by the plant doctor, for the members are 
thereby protected from quack practitioners. Many cases 
have been discovered in which the local physician’s diagnoses of 
ailments were quite evidently erroneous and the disabled 
members were suffering the consequences. The company doctor 
does not treat the association members but sends them to a 
reputable physician from whom they will be certain to secure 
the proper treatment. 

Not only should the services of a reputable physician be 
retained by the association in order to guard against malin¬ 
gering on the part of a disabled member, but he should also be 
consulted as to whether the member is able to resume his 
usual employment. It often happens that while a member who 
has been disabled may not be sufficiently recovered to take up 
his previous work, he may be well enough to engage in other, 
perhaps lighter work. A sick or visiting committee composed 
of laymen obviously has not the knowledge that would 
enable it to make such a distinction. 

Such a committee can nevertheless be of service to an 
association. It can determine whether members drawing 
benefits are abiding by the rules of the association with ref¬ 
erence to conduct while drawing benefits. One association, for 
instance, reported: 

“We have had one or two cases where the Association 
refused to allow the sick benefit, even when medical certificates 
had been presented, because it was shown that the members 
were not taking proper care of themselves while under 
medical care.” 

Such a committee, moreover, can investigate the home 
conditions of members and in cases of special need, and it may 
recommend to the association that benefits be paid for a 
longer time than that regarded necessary by the physician. 
This is the practice followed by a Philadelphia association: 

“We do not feel that in every case the physician is the only 
person qualified to state when the employee is entitled to bene¬ 
fits, and when he should return to work. 

“In other words, we try to deal with each case on its 
132 


merits, with a view of being as liberal as possible toward our 
employees.” 

The sick or relief committee in associations where its per¬ 
sonnel is periodically changed is also a means of bringing the 
members into intimate touch with the operation of the 
association. 

Statements of employers are at variance as to the value of 
such committees. In some cases it is stated that the visits of 
the sick committee are greatly appreciated by members, as it 
shows that the association takes a real interest in them during 
disability. Quite often, however, the sick committee is re¬ 
garded by members largely as a committee of detectives whose 
only duty it is to try to detect malingering. Several associa¬ 
tions reported that because of this attitude toward the com¬ 
mittee and the dislike of members to serve on it, the abolition 
of the committee was being considered. 

Other associations stated that members objected to being 
placed on the sick committee because they wanted to have 
their evenings and spare time for themselves. 

In a few associations the work of the relief or visiting 
committee is done by one person who may devote the whole 
or the greater part of his time to it. In a New Jersey plant 
the company nurse performs the functions of a visiting com¬ 
mittee. In a Pennsylvania steel plant, one man devotes his 
whole time to this work. 

Both the physician and the sick committee, however, have 
their functions to perform in the supervision of members 
drawing benefits. The physician is the person best qualified to 
state when a member is sufficiently recovered from a dis¬ 
ability to be able to return to work. The sick or visiting com¬ 
mittee, in addition to seeing that disabled members conduct 
themselves properly while receiving benefits, is in a position 
to consider each case individually and in this way render 
special assistance where it is needed. 

Waiting Period 

The term “waiting period” means that period at the com¬ 
mencement of a member’s disability during which he does not 
receive benefits from the association. Of the 382 associations 
studied, 377 pay temporary disability benefits. Of these, 11% 
have no waiting period. In the remainder the waiting period 

133 


varies from one day in the case of accidents to three weeks for 
sickness. Some of the associations have a waiting period for 
sickness but pay benefits from the first day for accidents. In 
others there is a different waiting period for sickness from that 
for accidents, the waiting period for accidents, either com¬ 
pensable or non-compensable, being shorter than for sickness. 
Three, six, seven and fourteen days are the commoner waiting 
periods, 58% of the association having a waiting period of 
seven days, 9% three days, 7% six days, and 6% fourteen 
days. A number of associations pay benefits from the com¬ 
mencement of disability if it extends beyond a certain period, 
which varies from two days to two weeks. In some associa¬ 
tions where there is a waiting period, benefits may be paid from 
the first day of disability if it extends over periods ranging 
from two to five weeks. 

Many associations provide that in event of a relapse 
brought on by a disabled member’s return to work, benefits 
are not withheld for the waiting period but are paid from the 
first day of disability due to such relapse. Thus: 

“If a member has been reported sick and returned to work 
within a period of six days, and having again ceased work 
on account of such sickness within three days thereafter, the 
Secretary shall compute the time of sickness of such member 
from the beginning of said sickness and the member shall be 
entitled to sick benefits for these following days of sickness the 
same as if he had not returned to work, provided he notifies 
the Secretary at once of his second sickness.” 

Another association has the following provision with regard 
to this matter: 

“Any conscientious efforts on the part of disabled members 
to return to work, which may actually result in relapse, 
causing two or more short periods of disability instead of one 
longer one, shall not deprive them of the benefits they would 
have received, had they remained away from work. They 
shall not, however, be paid benefits for the days on which they 
work.” 

There is a close relationship between the length of the wait¬ 
ing period and the rate of dues. It is evident that if an 
association does not have to pay benefits for the first seven 
days of disability, the dues, other things being equal, can be 
lower than if benefits were paid from the commencement of 
disability. Actuarial investigation alone will determine to 
what extent this will affect the rate of contribution of mem¬ 
bers. It may be held that an employee who is at all thrifty 

134 


should be able to carry his disability for the first week himself. 
On the other hand, it is a function of the association to prevent 
and minimize sickness as much as possible and it may there¬ 
fore be argued that the sooner a disabled member is aided the 
sooner he will get well. It is true that the payment of cash 
benefits will be of assistance to the member, but medical 
treatment immediately he is reported ill would be of even more 
help to him. By doing this the association would not only be 
benefiting the disabled member, because a disability that 
might develop into a serious illness could be arrested before it 
reached that stage, but it would also be protecting its own 
funds. A disabled member, even though not drawing benefits 
from the association during the first week of his disability, is 
potentially a charge upon it. Self-interest alone would prompt 
the association to see that such member be cured as speedily as 
possible, for in this way the amount of cash benefits paid 
would undoubtedly be lowered. 

In this connection the change in recent years in workmen’s 
compensation acts whereby “unlimited medical service” is 
provided for injured employees is of particular interest. 
Workmen’s compensation acts are intended to provide for an 
injured employee in two ways—to pay him a certain per¬ 
centage of his wages for a certain number of weeks and to 
provide him with medical service up to a certain sum and for 
a certain number of weeks. When the compensation acts were 
first enacted the amount to which an employer was liable for 
medical service was very small, ranging from $>25 to $>50. More¬ 
over, medical treatment was furnished the injured worker for 
only a short time. In a number of states, by later legislation, 
both the doctor’s fees and the length of time during which medi¬ 
cal treatment must be given have been increased. In this way 
the initial expenditures on compensation cases are higher, but 
it is found that the total cost is less than under the old scheme. 
The same result would undoubtedly be accomplished by benefit 
associations were they to provide disabled members with free 
medical attendance and treatment at the commencement of a 
disability. 


135 


VIII 

RESULTS OF MUTUAL BENEFIT ASSOCIATIONS 


The main object for which employers have organized or 
encouraged their employees to organize mutual benefit asso¬ 
ciations has been to eliminate casual relief subscriptions and 
to provide the workers in a systematic way with some measure 
of protection against industrial hazards. The criterion of the 
success of an association to most employers is to be found in 
the answer to the question: “Has the association received the 
support of a large percentage of the employees and has it been 
able, through the payment of disability benefits and death 
claims, to assist them and their families in time of need ?” 
Judged from this point of view the associations have generally 
fulfilled their purpose. 

The question then arises as to the further effects of the 
associations upon such factors as efficiency, production and 
labor turnover. It is apparent from the statements which the 
Conference Board has received from employers that the in¬ 
fluence of mutual benefit associations on these factors is con¬ 
sidered to be only secondary and indirect. 

Such indirect effects, however, have been reported upon 
absenteeism, efficiency, production, labor turnover, and rela¬ 
tions between management and men. In some instances em¬ 
ployers have reported that the associations have had a bene¬ 
ficial effect upon all of these factors. Absenteeism has been 
reduced, efficiency and production improved, labor turnover 
reduced and the relations between men and management made 
more cordial. In other cases the effect of the association has 
been more noticeable upon the relations between men and 
management and upon absenteeism, while efficiency, labor turn¬ 
over and production have not been so evidently affected. 

Assistance to Members in Sickness, Accident or Death 

Even where employers reported no effect upon absenteeism, 
efficiency, labor turnover, production or the relations be¬ 
tween men and management, they still expressed themselves 
as well satisfied with the work that the associations were 


136 


doing. Thus the vice-president of a Michigan plant, in which a 
mutual benefit association was organized in order to eliminate 
“passing the hat” among employees when a fellow employee 
became disabled, stated that: 

“It is not possible for us to determine whether the existence 
of this association has had any effect upon the morale, loyalty 
or productions of its members, but it has accomplished the 
results for which it was organized and has relieved many 
cases of suffering since its inception. It has paid the funeral 
expenses of a number of members and has proven a great 
help to many who would be entirely without means during 
a long illness had it not been for membership in this associa¬ 
tion.’’ 

An Illinois company stated that although it could not give 
“a very definite answer about the effect of the association 
upon absenteeism, efficiency, labor turnover, etc.,” it was 
certain that: 

“It has been of great benefit to some of our employees 
whose illness would otherwise have been much less well 
provided for, and others whose dependents have been paid 
considerable sums where they otherwise would have had 
very little on the death of the bread winner.” 

A Pennsylvania refining company wrote: 

“We have no records which would indicate that member¬ 
ship in our association has any particular effect upon absentee¬ 
ism, efficiency, turnover or production. We feel that the 
chief value of membership lies in the fact that a man is in¬ 
duced to provide for himself through a reasonable insurance 
plan which assists him in bearing the emergencies which are 
apt to occur.” 

Elimination of Casual Relief Subscriptions 

The elimination of collections for disabled employees was 
cited by a number of employers as the chief benefit of mutual 
benefit associations. 

A New Jersey rubber concern wrote: 

“We do not notice any effect upon absenteeism, efficiency, 
labor turnover or production, but the existence of the organi¬ 
zation has done away with the inequitable and burdensome 
special collections formerly taken up for the benefit of some 
particular unfortunate individual. This old custom of taking 
up a collection of money always depended upon the initiative 
of some individual friendly to the employee who was said to 
require assistance, with the result that the most needy were 
frequently neglected through a limited circle of friends, while 
others who required assistance less were the recipients of 
unreasonable sums of money.” 

137 


A similar view was expressed by a Colorado sugar company: 

“Prior to its organization, when employees were sick, 
frequently subscription papers were started around the mill 
to raise funds for donations to them. One purpose of the or¬ 
ganization was to get rid of these subscription lists and to 
take care of these cases without the stigma of charity.” 

One of the company officials of a New England plant stated 
that the mutual benefit association originated from an ob¬ 
servation and realization of the difficulties and dissatis¬ 
factions which resulted from the circulation of subscription 
papers throughout the plant: 

“Whenever any one was hurt or ill some friend would 
start a paper; sometimes there would be several papers going 
at once. If a man had many friends the solicitation was very 
eager; if he happened to be a stranger or a man with few 
friends, very little was done. I noticed, too, that on the sub¬ 
scription papers some men put down their names for larger 
amounts than they could properly pay, while others gave 
what seemed to be less than their proportionate share. To 
some men, a good deal of gratitude was expressed, while 
others were accused of being mean and tight-wads, though 
perhaps circumstances justified their giving but little.” 

To put the matter on a more systematic basis, and one 
“that would be fairer on the average” a mutual benefit 
association was organized. The Board’s correspondent described 
the results of the association as follows: 

“We never considered whether the plan was or was not of 
value to us as employers, except that it saved the shop from 
the nuisance of subscription papers. The consideration was that 
it was a good plan for the men themselves. Of course, in¬ 
cidentally, what is good for our men is good for ourselves, 
but frankly, we do not believe in starting things of this sort 
because they are good for business, as when the men feel 
that we are doing, anything of the sort because it is good for 
the business, then any advantage to the business is apt to 
become negligible. Our expectations in reference to the 
association have been fulfilled. It is a good thing. 

“We doubt whether it has had any effect upon the loyalty 
of the men, but believe it makes the shop a little more desir¬ 
able to them. I don’t think it has made the men any more 
industrious or any more efficient except that it has helped to 
care for them when first ill and to head off some serious 
illnesses.” 

Indirect Effects On Efficiency, Production, Labor 
Turnover and Industrial Relations 

An Indiana concern reported that, while there was no direct 
ntention in the organization of its benefit association or in the 

138 


subsequent conduct of its affairs to increase the loyalty of the 
men to the company, loyalty was nevertheless stimulated in¬ 
directly, because the insurance protection offered by the asso¬ 
ciation is at a lower rate than can be obtained otherwise. A 
company official informed the Board: 

“To the extent, therefore, that the man is obtaining in¬ 
surance protection while in our employ at a lower rate than 
he can obtain elsewhere, he is held to his job. We would, 
therefore, have no hesitation in saying that the association 
has stabilized our labor. To what extent, however, we cannot, 
of course, say. We never throw up in a man’s face that we are 
helping the association by paying the salary of the clerk or 
by lending our payroll clerks to deduct the amount of the 
association dues. Very likely the great majority of them do 
not understand that the company is under any expense in 
connection with the association. All they know is that if they 
leave the employ of the company, they lose their membership 
in the association. 

“The effect on the efficiency and industriousness of the 
employees is likewise wholly indirect. If knowledge on the 
part of the worker that he will obtain a certain amount of 
steady income in the event of sickness and that his bene¬ 
ficiaries will receive a sufficient amount to pay his funeral 
expenses, relieves some of his worry about the future and 
thus increases his efficiency—then the association has in¬ 
creased the efficiency of our employees. We believe, of course, 
that this psychological effect is good and that there is an in¬ 
creased efficiency on the part of the employees who are mem¬ 
bers of the association, but it is a matter which cannot be 
weighed in dollars and cents value to the corporation.” 

Many employers stated that, although they had no definite 
data as to the effect of the association upon absenteeism, 
efficiency, labor turnover, production or relations between 
men and management, they were nevertheless convinced that 
the association was distinctly worth while. The effect upon 
the aforementioned items was bound to be more or less in¬ 
tangible and therefore difficult to measure, but a number of 
employers were of the opinion that it was nevertheless a 
beneficial one. A Colorado copper company wrote: 

“The benefit (one-half the member’s rate of pay) helps an 
employee financially; therefore his mind is free from worry 
that would be caused by debts incurred during his disability, 
and therefore his work ought to be more efficient. 

“Most men appreciate the protection afforded them by a 
benefit association which is not conducted for profit, and prefer 
to work for a company which contributes to such an associa¬ 
tion. For instance, a greater number of the men working 
for other companies in this locality have insurance with 
accident companies, pay more in premiums and receive less 

139 


in benefits. The fact that the company makes a large contri¬ 
bution to the fund, guarantees its safety and at one time 
carried on their books a deficiency of $35,000, should create 
a feeling that on the part of the company there is a genuine 
desire to cooperate with the men.” 

A Connecticut silk company states: 

“While it is hard to prove the positive benefits, there can 
be no doubt that much discontent and unhappiness are elim¬ 
inated, and that is a great gain. It is just as important to 
prevent an unwholesome state of mind as it is to cure an 
unhealthy body. While it may not result in loyalty and 
contentment it certainly removes a chief breeding ground of 
disaffection.” 

An Indiana wheel company reported that it felt that the 
association “tended somewhat” to promote better relations 
between men and management and “to some extent any¬ 
way” to reduce labor turnover and “instill a spirit of fra- 
ternalism among our employees.” It could not, however, 
“hazard an estimate” as to the precise effect. 

Another employer was of the opinion that the association 
“must in the nature of things be helpful in all these ways” 
although no definite data were available. 

Several employers described their mutual benefit associations 
as “one of the bonds” among many that “tie our men to us 
and form a pleasant relationship between the men and manage¬ 
ment.” Others described the association as “one of the cogs” 
in the wheel that helped bring about less absenteeism and 
labor turnover, improved efficiency and production, and 
cordial relations between men and management. 

One company reported that in several of its factories the 
association “has taken the place with the men of the union of 
their trade.” 

A New York plant stated that, as the management of the 
association is entirely in the hands of the employees, it is “a 
real aid in managing and controlling them.” 

An Ohio steel plant reported that the benefit association 
“has helped improve the attitude of some men who under¬ 
stand managerial affairs with difficulty.” 

A New Jersey company found its association an aid to 
management in conveying ideas to the employees which 
“would be very hard to put over in any other way.” Through 
the association the company is also able to carry on social 
and recreational features “much more successfully than if the 

140 


company were running them without the aid of an association 
of this kind.” 

One employer reported that although it would be very 
difficult to trace the effect of the association upon absenteeism, 
efficiency, labor turnover, production and relations between 
management and men, he believed that it “sometimes has a 
tendency to keep people in our employ and also has a good 
effect upon the relations between management and em¬ 
ployees.” In this association membership may be retained 
after the member leaves the company’s employ, and as a 
result of this it was stated, “there is no doubt that the association 
has a good effect on the community at large.” 

Effect On Morale 

The chief effect of the associations, according to several 
employers, was that the employees were brought closer to¬ 
gether and mutual understanding improved. This fraterniza¬ 
tion resulted in a better morale within the plant. One employer 
said the association developed “rather a homelike feeling” in 
the plant. “Great group spirit” was reported by another 
company. 

The extent to which an association is able to develop 
esprit de corps among its members and to establish a cordial 
relation between men and management appears to depend to a 
considerable degree upon the extent to which social and rec¬ 
reational activities are engaged in. Where the association 
confines itself to the collection of dues and the payment of 
benefits and provides no opportunity for the members to meet 
together in a social way, the organization tends to become 
merely an insurance device. 

Entertainments, dances, excursions, field days and other 
social events at which all the members meet upon an equal 
footing are an undoubted stimulus in establishing a “family 
spirit” among the members. Several employers have re¬ 
ferred to this as one of the outstanding benefits of the associa¬ 
tions—the opportunity it gives all the members of an or¬ 
ganization to get together on a common ground and with a 
common interest. A Massachusetts electrical company stated 
that it had every reason to believe that, as a result of such 
gatherings, membership in the association has had a beneficial 
effect upon the loyalty of the members to the company. 

141 


“This was brought about to some extent, at least, by 
gatherings of groups of members at various times during 
the year and by one or more gatherings in the nature of an 
Outing or Field Day of all the members which occurred every 
summer; also by social affairs in which all the members could 
display an interest.” 

According to the experience of a southern cotton com¬ 
pany, “the very best men in the mill are members who give 
better service with greater efficiency and less absenteeism and 
whose relations are much closer to the management than 
others who are not members.” 

A number of other employers reported that the members of 
the associations where membership was voluntary were the 
most steady, efficient and intelligent of the men employed.” 

Effect on Absenteeism 

In a number of cases, absenteeism was reported as having 
been reduced as a result of the check which the associations 
are able to keep on disabled members through sick or visiting 
committees. An Illinois steel company reported: 

“The effect of our association upon absenteeism has been 
salutary. The very fact that a man’s absence will be inquired 
into by someone on and in behalf of the association, has a 
deterring effect. Our association has been the means of holding 
in our employ many good workmen who would not otherwise 
have stayed continuously, and in that way has helped out 
labor turnover. Production, of course, is affected by the 
number of efficient employees who are working, and I believe 
our association has helped our production.” 

A Rhode Island foundry stated that the association tends 
to minimize absenteeism because every case of disability is 
examined by the sick committee. If the committee “have 
any doubts about the termination of an illness they will per¬ 
sonally call upon the man.” In addition a doctor’s certificate 
may be required. This supervision “tends to bring the man 
back to work as soon as he is able.” 

One employer considered that any reduction in absenteeism 
depended largely upon the work done by the sick or visiting 
committee. 

“In a small town where the employees live within a short 
radius of the plant and most of them are well known, the 
employees’ visiting committee is very effective in following 
up absentees and reducing the lost time. Employees’ visiting 
committee is not very effective in regard to absenteeism in 
a large manufacturing community where employees are 
scattered and live distances from the plant.” 

142 


A Pennsylvania publishing company was of the opinion 
that the two days’ waiting period in its association had a 
beneficial effect upon absenteeism. 

“There seems to us to be no doubt of the good effect which 
the lapse of two days between the period of illness and the 
period when benefits start has upon absenteeism. We have 
always felt, and still feel that, especially among our many 
women employees, the fact that they must themselves carry 
the first two days of illness, and further must present a certi¬ 
ficate of illness signed by a physician, has greatly decreased 
the non-attendance at work.” 

In contrast to the foregoing instances of a reduction in 
absenteeism believed to be effected through benefit associa¬ 
tions are the statements of several employers who reported 
that absenteeism had been encouraged and increased. The 
reason given for this was that members were receiving benefits 
from other sources beside the mutual benefit association and 
that the total benefits received were equal to or greater than 
the members’ wages. Such additional benefits might either 
be in the form of compensation payments or money received 
from lodges or industrial insurance companies. A company 
official of a mid-western concern wrote: 

“So far as absenteeism is concerned, I believe that the 
workings of the relief association have encouraged rather than 
discouraged absence from work, especially in such cases 
as absence because of injury, in which case the injured 
would draw compensation and also relief benefits. This would 
make it appear to him very much to his interest to malinger 
if possible.” 

A Massachusetts company reported: 

“Absenteeism has been extended in some cases, due to 
some of the employees receiving sick benefits from other 
associations, which in the aggregate amounted to more than 
the employee would have received had he labored during 
the period of recuperation.” 

Another company reported that during the time the asso¬ 
ciation paid benefits for the first week of disability ‘‘we felt 
that it created a tendency on the part of those sick for a few 
days with colds, etc., to stay the rest of the week in order to 
get the benefit.” At the end of two years a waiting period of 
seven days was established and this tendency was checked. 

One reason given by several employers for the lack of any 
noticeable effect upon absenteeism, efficiency, labor turnover, 

143 


production or relations between men and management was the 
small sum of money paid in weekly benefits. 

The following came from a Massachusetts shoe company: 

“We have not perceived any noticeable effect of the associa¬ 
tion upon absenteeism, efficiency, labor turnover, production, 
or relations between management and men. I believe there is 
no apparent effect upon absenteeism, efficiency, labor turn¬ 
over, or production, because the benefit of $5 per week is too 
small for one to stay out longer than necessary to obtain, 
and yet is large enough to be of substantial help in case of 
sickness. It seems to me a larger benefit would have an ill 
effect upon the points mentioned.” 

One company in which the association pays a disability 
benefit of $5 per week wrote: 

“The benefits are not sufficiently large to encourage men 
laying off from work in order to receive them. Furthermore, 
the employees’ representatives on the board would soon 
discover cases in which the employee was imposing upon the 
association and if this fact was determined, the benefits would 
be discontinued.” 

Attitude of Members Toward Associations 

While members of mutual benefit associations who were 
interviewed by representatives of the Conference Board were 
appreciative of its protection in case of sickness, accidents or 
death, and while they greatly preferred this method of han¬ 
dling the problem of providing relief for disabled workers to 
that of “passing the hat,” they displayed little enthusiasm 
on the subject. The cost of the insurance was small, benefits 
were paid when due, and that appeared to be all that they 
were interested in. In many instances, the rate of benefit was 
considered to be so small as to be of but little assistance to an 
employee who could not work. However, with the assistance 
obtained from outside organizations, the disabled member 
was able to get along without having to draw upon his savings 
to too large an extent. 

One criticism frequently encountered among members of 
associations was the restriction of the insurance to the plant 
in which the association was in operation. It was realized that 
the relatively low cost of the protection was closely connected 
with this restriction, but many employees expressed them¬ 
selves as being in favor of a plan whereby membership could 
be retained after leaving the employ of a company, even if it 
did entail a higher rate of dues. It was considered by such 

144 


employees that, in this regard, the insurance provided by 
fraternal societies was much superior to that provided by 
mutual benefit associations. 

Two exceptions may be noted to the statement that mem¬ 
bers of associations manifested but little enthusiasm about 
the organizations. First, members of associations which carried 
on social and recreational activities whereby the members 
met frequently and came to know each other better were much 
more enthusiastic about their organizations than members 
of associations which were conducted solely or largely as 
insurance organizations. It is easy to realize why this would 
be so. A mutual benefit association which confines itself 
solely to the collection of dues and the payment of funds to 
disabled members cannot occupy the same place in the minds 
of its members as an association which, through athletic and 
social events, brings its members together periodically for a 
good time. In the case of the former association, contact with 
the members beyond the collection of the weekly or monthly 
dues is confined entirely to those of its members who become 
disabled and draw funds. While it is true that the payments of 
funds to a disabled member serves to emphasize upon the 
minds of other members the fact that they are protected in 
like degree, this does little to develop that feeling of good 
fellowship among members which experience shows results 
from the social evenings and outings that many associations 
hold. The investigations of the Conference Board show con¬ 
clusively that the value of a benefit association is enhanced in 
the eyes of its members by measures of this kind, whether 
dances, excursions, social evenings, dinners or field days. 

The second exception to this statement applies to those 
members of associations who either because of their own dis¬ 
ability or the death of a member of their own family have 
drawn benefits from the funds. The records of every associa¬ 
tion contain instances in which, were it not for the receipt of 
weekly disability or death benefits, the unfortunate worker 
would have had to depend upon charity. Such members as 
had experienced the advantages of benefits when they were 
deprived of earning power, were loud in their praise of the 
value of the association. As would naturally be expected 
where the benefits received amounted to but $5 or $6 a week, 
the enthusiasm was not nearly so great as in those associa- 

145 


tions which paid benefits amounting to 50%, 66% or 75% of 
average weekly wages. This was true in every case of members 
who were interviewed, whether they had received benefits or 
not. Interest in and enthusiasm for an association is closely 
related to the feeling of the members as to whether the rate of 
benefit is an adequate one. 

In benefit associations in which membership is voluntary, 
the best indication of the extent to which the workers favor 
the organizations is to be found in the percentage of the 
employees who are members. This ranges from 7% to 99% 
of employees among those associations which furnished the 
Board with the information. As pointed out above, the ade¬ 
quacy or inadequacy—as conceived by employees—of the 
rate of benefits will have considerable influence upon the 
attitude of the workers toward the association. In many 
associations the scale of benefits remains today what it was 
ten or fifteen years ago. Under such circumstances it is not 
surprising if employees are not eager to join the organization. 
This is a matter that should receive the attention of a great 
number of associations, in order that their scale of benefits 
may be revised and better related to the cost of living of today. 
Notwithstanding this inadequate rate of benefits which exists 
in many associations, perhaps the most reliable indication of 
the workers’ attitude as a whole toward mutual benefit associa¬ 
tions is to be found in the great increase in the number of such 
organizations during the last decade, despite the fact that com¬ 
mercial insurance companies have entered the field of group dis¬ 
ability insurance. This indicates that the mutual benefit asso¬ 
ciation has become more and more appreciated by an increas¬ 
ingly large number of wage earners as an equitable and sys¬ 
tematic method whereby they may secure some degree of 
protection in case of sickness, accidents or death. 


146 


APPENDIX 

Industrial Concerns Which Furnished Data Regarding 
Mutual Benefit Associations* 


Name of Company Location 

Allen & Company, Inc., S. L.Philadelphia, Pa. 

Alpha Portland Cement Co.Chicago, Ill. 

Altorfer Bros. Co.Peoria, Ill. 

American Bank Note Co.New York, N. Y 

American Blower Co.Detroit, Mich. 

American Book Co.New York, N. Y. 

American Bosch Magneto Co.Springfield, Mass. 

American Cast Iron Pipe Co.Birmingham, Ala. 

American Engineering Co.Philadelphia, Pa. 

American Hard Rubber Co.College Point, N. Y. 

American Hardware Corp.New Britain, Conn. 

American La France Fire Engine Co.Elmira, N. Y. 

American Laundry Machinery Co.Cincinnati, Ohio 

American Manganese Steel Co.Chicago Heights, Ill. 

American Pulley Co.Philadelphia, Pa. 

American Rolling Mill Co.Middletown, Ohio 

American Sash & Door Co.Kansas City, Mo. 

American Sheet & Tin Plate Co.Cambridge, Mass. 

American Soda Fountain Co.Boston, Mass. 

American Steel Foundries.Chicago, Ill. 

American Sugar Refining Co.New York, N. Y. 

American Telephone & Telegraph Co.New York, N. Y. 

Armstrong Cork Co....Pittsburgh, Pa. 

Arnold Print Works.North Adams, Mass. 

Ashland Fire Brick Co.Ashland, Ky. 

Atlantic Refining Co.Philadelphia, Pa. 

Avery Co.Peoria, Ill. 

Baker-Vawter Co.Benton Harbor, Mich. 

Baker, A. T. & Co., Inc.Philadelphia, Pa. 

Baker, Walter & Co., Ltd.Dorchester, Mass. 

Bantam Ball Bearing Co.Bantam, Conn. 

Barber-Colman Co.Rockford, Ill. 

Barcalo Mfg. Co.Buffalo, N. Y. 

Barth, L. & Son.New York, N. Y. 

Bausch & Lomb Optical Co.Rochester, N. Y 

Baxter Laundry Co.Grand Rapids, Mich. 

Bay State Cotton Corp.Lowell, Mass. 

Belle City Malleable Iron Co.Racine, Wisconsin 

Berkey & Gay Furniture Co.Grand Rapids, Mich. 

Bessemer Gas Engine Co.Grove City, Pa. 

Bethlehem Steel Co.Bethlehem, Pa. 

Billings & Spencer.Hartford, Conn. 


*The associations in some of these concerns may have gone out of existence 
since the investigation. In certain cases the association had already lapsed at 
that time, but information received by the Board regarding causes of failure 
was used in the investigation. 


147 












































Appendix —Continued 


Name of Company Location 

Bird & Son.East Walpole, Mass 

Blumenthal, Sidney & Co., Inc.New York, N. Y 

Borden’s Farm Products Co., Inc.New York, N Y. 

Boston Rubber Shoe Co.Boston, Mass. 

Boston Woven Hose & Rubber Co.Boston, Mass. 

Bowser, S. F. & Co., Inc.Fort Wayne, Ind. 

Brewster & Co.Long Island City, N. Y. 

Bridgeport Brass Co.Bridgeport, Conn. 

Brier Hill Steel Co.Youngstown, Ohio 

Briggs, D. F. Co.Attleboro, Mass. 

Brill Co., J. G...Philadelphia, Pa. 

Brooklyn Rapid Transit Co.Brooklyn, N. Y. 

Brown Hoisting Machine Co.Cleveland, Ohio 

Browning Co., The.Cleveland, Ohio 

Brown-Life Gear Co.Syracuse, N. Y. 

Brown & Bigelow.St. Paul, Mich. 

Brown & Sharpe Mfg. Co.Providence, R. I. 

Buckeye Iron & Brass Works.Dayton, Ohio 

Buffalo Forge Co.Buffalo, N. Y. 

Builders Iron Foundry.Providence, R. I. 

Bunker Hill and Sullivan Mining & Con¬ 
centrating Co...Kellogg, Idaho 

Burroughs Adding Machine Co.Detroit, Mich. 

Byers, A. M. Co.Pittsburgh, Pa 


Cadillac Motor Car Co. 

California & Hawaiian Sugar Refining 

Corp... 

Calvert Lithographing Co. 

Capwell Co., H. C.>. 

Carborundum Co. 

Carnegie Steel Co. 

Carpenter Steel Co. 

Celluloid Co. 

Central States Envelope Co. 

Challenge Machinery Co. 

Chambersburg Engineering Co. 

Cheney Bros. 

Chicago Bridge & Iron Works. 

Chicago Tunnel Co. 

Cincinnati Ball Crank Co. 

Cincinnati Coffin Co. 

Clark Equipment Co. 

Cleveland Hardware Co. 

Cleveland Provision Co. 

Cleveland Twist Drill Co., The. 

Cluett Peabody & Co., Inc. 

Colgate & Co. 

Collins, A. M. Mfg. Co. 

Colorado Fuel & Iron Co. 

Colt’s Patent Fire Arms Mfg. Co. 

Commonwealth Edison Co. 


Detroit, Mich 

San Francisco, Calif. 
Detroit, Mich. 

Oakland, Calif. 

Niagara Falls, N. Y. 
Greenville, Pa. 

Reading, Pa. 

Newark, N. J. 

Indianapolis, Ind. 

Grand Haven, Mich. 
Chambersburg, Pa. 

South Manchester, Conn. 
, Chicago, Ill 
Chicago, Ill. 

. Cincinnati, Ohio 
.Cincinnati, Ohio 
. Buchanan, Mich. 

. Cleveland, Ohio 
. Cleveland, Ohio 
. Cleveland, Ohio 
.Troy, N. Y. 

.Jersey City, N. J. 
.Philadelphia, Pa. 

.Pueblo, Colo. 

.Hartford, Conn. 

.Chicago, Ill 


148 



















































Appendix —Continued 


Name of Company 
Computing Scale Co. of America. 
Connersville Blower Co., The.. .. 

Consolidated Gas Co. of N. Y_ 

Craddock-Terry Co. 

Crane Co. 

Crawford McGregor & Canby Co 

Crocker-Wheeler Co. 

Crofut & Knapp Co. 

Crompton & Knowles Loom Wks. 

Crouse-Hinds Co. 

Curtain Supply Co. 

Curtis Companies. 

Curtis Publishing Co., The. 


Location 
. Dayton, Ohio 
. Connersville, Ind. 
.New York, N. Y. 
.Lynchburg, Va. 

. Bridgeport, Conn. 

. Dayton, Ohio 
.Ampere, N. J. 

.South Norwalk, Conn. 
.Worcester, Mass. 
.Syracuse, N. Y. 
.Chicago, Ill. 

. Clinton, Iowa 
. Philadelphia, Pa. 


David, B. Edmund, Inc.Paterson, N. J. 

Davis Coal & Coke Co.Cumberland, Md. 

Dayton Engineering Laboratories Co.Dayton, Ohio 

Deere & Co.Moline, Ill. 

De Laval Separator Co., The.Poughkeepsie, N. Y. 

De La Verque Machine Co.New York, N. Y. 

Demuth, Wm. & Co.New York, N. Y. 

Dennison Mfg. Co.Framingham, Mass. 

Derby & Co., P. Inc.Gardner, Mass 

Disston & Sons, Henry.Philadelphia, Pa. 

Dodge, Nathan D. Shoe Co.Newburyport, Mass. 

Dodge Mfg Corporation.Mishawaka, Ind. 

Dodge Steel Pulley Corp.Oneida, N. Y. 

Doehler Die Castings Co.Brooklyn, N. Y. 

Dold, Jacob, Packing Co.Buffalo, N. Y. 

Donnelley, R. R. & Sons Co.Chicago, Ill. 

Douglas Shoe Co., W. L.Brockton, Mass. 

Draper Corp..... .Hopedale, Mass. 

Duluth Street Railway Co.Duluth, Minn. 

DuPont de Nemours & Co., E. I.Wilmington, Del. 

Durston Gear Corp.Syracuse, N. Y. 

Dutchess Bleachery, Inc.Wappingers Falls, N. Y. 

Dutchess Mfg. Co.Poughkeepsie, N. Y. 


Eaton, Crane & Pike Co.. . .Pittsfield, Mass. 

Edison Phonograph Works.West Orange, N J. 

Edison Storage Battery Co.West Orange, N. J. 

Electric Hose & Rubber Co.Wilmington, Del. 

Elgin National Watch Co.Chicago, Ill. 

United States Steel Corporation.Ellwood City, Pa. 

Emerson-Brantingham Co.Rockford, Ill. 

Empire Steel & Iron Co.Catasauqua, Pa 

Essex Rubber Co.Trenton, N. J. 

Everlastik, Inc.Chelsea, Mass. 

Eagle, J. H. & C K. Inc.Shamokin, Pa. 

Endicott Johnson Corp.Endicott, N. Y. 

Fairbanks Morse & Co.Beloit, Wis. 

Farley & Loetscher Mfg. Co.Dubuque, Iowa 


149 



















































Appendix —Continued 


Name of Company 

Farrington Mfg. Co. 

Federal Rubber Co. of Ill. 

Felt & Tarrant Mfg. Co. 

Finch Pruyer & Co Inc. 

Flint Vehicle Factories. 

Foot, Schulze & Co. 

Forbes Lithograph Mfg. Co. 

Fort Smith Wagon Co. 

Fox, Charles K. 

Fox & Co., G. Inc. 

Franklin Mfg. Co., H. H. 

French & Hecht. 

Fuller Brush Co.. 

Fulton Bag & Cotton Mills. 

Gair, Robert Co. 

General Aluminum Brass Mfg. Co 

General Baking Co. .. 

General Chemical Co. 

General Electric Co. 

General Motors Corp. 

Gibson, W D. Co. 

Gilbert & Barker Mfg. Co. 

Gillette Rubber Co. 

Globe Wernicke Co. 

Godman, H C. Co. 

Goodell-Pratt Co. 

Goodyear Tire & Rubber Co. 

Gorham Mfg. Co. 

Grand Rapids Railway Co. 

Great Western Sugar Co. 

Greenfield Tap & Die Corp. 

Grinnell Co. Inc. 

Grit Publishing Co. 


Location 
Boston, Mass. 

Cudahy, Wis. 

Chicago, Ill. 

Glens Falls, N Y. 

Flint, Mich. 

.Saint Paul, Minn. 

. Boston, Mass. 

. Fort Smith, Ark. 
.Haverhill, Mass 
.Hartford, Conn. 

. Syracuse, N. Y. 
.Davenport, Iowa 
.Hartford, Conn. 

.Atlanta, Ga. 

.New York, N. Y. 

.Detroit, Mich. 

. Charlestown, Boston, Mass. 
.New York, N. Y 
.Schenectady, N. Y. 
.Detroit, Mich 
.Chicago, Ill. 

.Springfield, Mass 
. Eau Claire, Wis. 
.Cincinnati, Ohio 
. Columbus, Ohio 
.Greenfield, Mass. 

.Akron, Ohio 
.Providence, R. I. 

.Grand Rapids, Mich 
.Fort Collins, Col. 
.Greenfield, Mass. 
.Providence, R. I. 
.Williamsport, Pa. 


Haines Jones & Cadbury Co..Philadelphia, Pa. 

Hall & Brown Wood Working Machine Co. St. Louis, Mo. 

Hamilton Watch Co.Lancaster, Pa. 

Hard Mfg. Co..Buffalo, N. Y. 

Harmony Mills.Boston, Mass. 

Hartmann Trunk Co.Racine, Wis. 

Haynes Automobile Co.Kokomo, Ind. 

Hazel-Atlas Glass Co.Grafton, West. Va. 

Heald Machine Co.Worcester, Mass 

Heinz, H. J. Co.Pittsburgh, Pa. 

Hickey-Freeman Co.Rochester, N. Y. 

Hill, W. H. Envelope Co.Worcester, Mass. 

Hill Pump Valve Co.Chicago, Ill. 

Hodgman Rubber Co.Tuckahoe, N. Y. 

Hoe & Co., R.New York, N. Y. 

Holt Mfg. Co..Peoria, Ill. 

Holtzer-Cabot Electric Co.Boston, Mass. 


150 



















































Appendix —Continued 

Name of Company Location 

Hooker Electrochemical Co.Niagara Falls, N. Y 

Hubbard Eldredge & Miller.Rochester, N. Y. 

Huber Mfg. Co.Marion, Ohio 

Huyck & Sons, F. C.Albany, N Y. 

Hydraulic Steel Co.Cleveland, Ohio 

Hygrade Lamp Co.Salem, Mass. 

Ingersoll-Rand Co.New York, N. Y. 

International Correspondence Schools.Scranton, Pa. 

International Harvester Co.Chicago, Ill 

International Silver Co.Bridgeport, Conn. 

Irons & Russell Co.Providence, R. I. 

Irving-Pitt Mfg. Co.Kansas City, Mo. 

Jamestown Worsted Mills.Jamestown, N. Y. 

Jeffrey Mfg. Co.Columbus, Ohio 

Joseph & Feiss Co.Cleveland, Ohio 

Kahn Tailoring Co.Indianapolis, Ind. 

Kann, S. Sons Co.Washington, D. C. 

Kansas City Railways Co.Kansas City, Mo. 

Kayser, Julius & Co.Brooklyn, N. Y. 

Keith, Geo. E. Co.Campello, Mass. 

Kellogg, P. P. & Co.Springfield, Mass. 

Ketterlimus Lithographic Mfg. Co.Philadelphia, Pa. 

Keystone Steel & Wire Co.Peoria, Ill. 

Kimberly-Clark Co.Neenah, Wis 

Kingston Coal Co.Kingston, Pa. 

Klaxon Company.Newark, N. J. 

Knox Hat Co.Brooklyn, N Y. 

Kops Bros.New York, N. Y. 

La Crosse Plow Co.La Crosse, Wis. 

Lake Torpedo Boat Co.Bridgeport, Conn. 

Landesman Hirschheimer Co.Cleveland, Ohio 

Landis Tool Co.Waynesboro, Pa. 

Larkin Co.Buffalo, N. Y. 

Lawrence, A. C. Leather Co.Boston, Mass. 

Le Blond, R. K. Machine Tool Co.Cincinnati, Ohio 

Leeds & Northrup Co.Philadelphia, Pa. 

Ley, Fred T. & Co. Inc.Springfield, Mass. 

Lidgewood Mfg. Co.Brooklyn, N Y. 

Lilly, Eli & Co.Indianapolis, Ind. 

Lisk Mfg. Co.Canandaigua, N Y. 

Lockwood Greene & Co.Boston, Mass. 

Locomobile Co.Bridgeport, Conn. 

Lodge & Shipley Machine Tool Co.Cincinnati, Ohio 

Logan Swift & Brigham Envelope Co.Worcester, Mass. 

Louisville & Interurban Railroad Co.Louisville, Ky. 

Lowney, Walter M. Co.Boston, Mass. 

Lucas & Co., John.Philadelphia, Pa. 

Lukens Steel Co.Coatesville, Pa. 

Lupton’s, David, Sons Co.Philadelphia, Pa. 


151 



















































Appendix —Continued 


Name of Company 

McCallum Hosiery Co. 

McCray Refrigerator Co. 

McFarland, J. Horace Co. 

Maddock’s, Thomas, Sons Co.... 

Majestic Mfg. Co. 

Manning Maxwell & Moore, Inc. 

Manning, John A. Paper Co. 

Marion Malleable Iron Wks. 

Max Ams Machine Co. 

Marshall-Wells Co. 

Mayer, F. Boot & Shoe Co. 

Mellens Food Co. 

Merchant Shipbuilding Corp. 

Mergenthaler Linotype Co. 

Michaels Stern & Co. 

Michigan Bolt & Nut Works. 

Miehle Printing Press & Mfg. Co 

Miles, Dr. Medical Co. 

Miller, Edward & Co. 

Miner Hillard Milling Co. 

Minneapolis Street Railway Co.. 

Mishawaka WoolenMfg. Co. 

Monroe Calculating Machine Co. 

Morgan Construction Co. 

Morgan Envelope Co. 

Morrell & Co., John. 

Morris Machine Works. 

Morris & Co. 

Morse Dry Dock & Repair Co... 

Morton Mfg. Co. 

Mount Hope Finishing Co. 

Mueller, H. Mfg. Co. 

Mueller Metals Co. 

Multibestos Co. 

Murphy Varnish Co. 


Location 

.Northampton, Mass. 

. Kendallville, Ind. 
.Harrisburg, Pa. 

.Trenton, N. J. 

.St. Louis, Mo. 

. Boston, Mass. 

.Troy, N. Y. 

. Marion, Ind. 

. Bridgeport, Conn. 

. Duluth, Minn. 

. Milwaukee, Wis. 

. Boston, Mass. 

. Chester, Pa. 

. Brooklyn, N. Y. 

. Rochester, N. Y. 

. Detroit, Mich. 

. Chicago, Ill. 

.Elkhart, Ind. 

.Meriden, Conn. 
.Wilkes-Barre, Pa. 
Minneapolis, Minn. 
.Mishawaka, Ind. 

.Orange, N. J. 

.Worcester, Mass. 
.Springfield, Mass. 
.Ottumwa, Iowa 
. Baldwinsville, N Y. 

. Chicago, Ill 
. Brooklyn, N. Y. 

.Muskegon Heights, Mich. 
.North Dighton, Mass. 

. Decatur, Ill. 

.Port Huron, Mich. 
.Walpole, Mass. 

.Newark, N. J. 


Narrow Fabric Co.:.Reading, Pa. 

National Acme Co.Cleveland, Ohio 

National Cash Register Co.Dayton, Ohio 

National Cloak & Suit Co.New York, N. Y. 

National Envelope Co.Waukegan, Ill. 

National Leather Co.Peabody, Mass. 

National Malleable Castings Co.Cleveland, Ohio 

Nekoosa-Edwards Paper Co.Port Edwards, Wis. 

Nettleton Co., A. E.Syracuse, N. Y. 

New Departure Mfg. Co.Bristol, Conn. 

New England Butt Co.Providence, R. I. 

New England Confectionery Co.Boston, Mass. 

New Haven Clock Co.New Haven, Conn. 

New Jersey Zinc Co.Palmerton, Pa. 

New York Edison Co.New York, N. Y. 


152 




















































Appendix —Continued 


Name of Company Location 

New York Railways Co.New York, N. Y. 

Norton Co.Worcester, Mass. 

Nunn, Bush & Weldon Shoe Co.Milwaukee, Wis. 

Oakville Co.Waterbury, Conn. 

Oneida Community Ltd.Oneida, N. Y. 

Onondaga Pottery Co.Syracuse, N Y. 


Paper Container Co. 

Parkhill Mfg. Co. 

Petroleum Iron Works Co. 

Phelps Dodge Corp. 

Philadelphia Electric Co. 

Philadelphia Rapid Transit Co. 

Philadelphia & Reading Railway Co. 

Phoenix Silk Mfg. Co. 

Phoenix Underwear Co. 

Pierce-Arrow Motor Car Co. 

Pierce, S. S. Co. 

Pilgrim Laundry Co. 

Pillsbury Flour Mills Co. 

Pittsburgh Coal Co. 

Plimpton Mfg. Co. 

Plimpton Press. 

Plymouth Cordage Co. 

Port Huron Engine & Thresher Co.. 
Powers-Weightman, Rosengarten Co 

Printz Biederman Co. 

Proctor & Gamble 

Pullman Co. ...... 

Public Service Co. of North Illinois.. 

Packard Motor Car Co. 

Palmolive Co. 


.Battle Creek, Mich 
. Fitchburg, Mass. 
.Sharon, Pa. 

. Bisbee, Ariz. 
.Philadelphia, Pa. 

. Philadelphia, Pa. 
.Philadelphia, Pa. 
.Allentown, Pa. 

.Little Falls, N. Y. 

. Buffalo, N. Y. 

. Boston, Mass. 

. Boston, Mass. 
.Minneapolis, Minn. 
.Pittsburgh, Pa. 
.Hartford, Conn. 
.Norwood, Mass. 

.North Plymouth, Mass. 
. Port Huron, Mich. 

. Philadelphia, Pa. 

. Cleveland, Ohio 
Ivorydale, Ohio 
.Chicago, Ill. 

. Chicago, Ill. 

. Detroit, Mich. 

. Milwaukee, Wis. 


Raritan Copper Works.Perth Amboy, N J. 

Reed Mfg. Co.Erie, Pa. 

Reed & Prince Mfg. Co.Worcester, Mass. 

Remington Arms Co. Inc.Bridgeport, Conn 

Remy Electric Co.Anderson, Ind. 

Republic Metalware Co.Buffalo, N. Y. 

Rochester Gas & Electric Corp.Rochester, N. Y. 

Roessler & Hasslacher Chemical Co.Perth Amboy, N. J. 

Royal Worcester Corset Co.Worcester, Mass. 

Rumford Chemical Works.Providence, R. I. 

Ruberoid Co.Joliet, Ill. 

R. & V. Motor Co.East Moline, Ill 

St. Marys Wheel & Spoke Co.St. Marys, Ohio 

Scranton Forging Co.Scranton, Pa. 

Selby Shoe Co.Portsmouth, Ohio 

Service Motor Truck Co.Wabash, Ind. 

Shartenberg & Robinson Co.New Haven, Conn. 

Sherwin Williams Co.Cleveland, Ohio 


153 


















































Appendix —Continued 

Name of Company Location 

Simmons, R. F. Co.Attleboro, Mass. 

Simmons, Ernest Mfg. Co.Port Chester, N. Y. 

Simonds Mfg. Co.Fitchburg, Mass. 

Smith & Wesson Works.Springfield, Mass. 

Solvay Process Co.Syracuse, N. Y. 

Southern Pacific Co.San Francisco, Cal. 

Spalding, A. G. & Bros.Chicopee, Mass. 

Splitdorf Electrical Co.Newark, N. J. 

Sprague Electrical Works.Bloomfield, N. J. 

Staley, A. E. Mfg. Co.Decatur, Ill. 

Standard Oil Co. Refineries.Casper, Wyo. 

Standard Oil Co. of Indiana.Chicago, Ill. 

Standard Wheel Co.Terre Haute, Ind. 

Stanley Works.New Britain, Conn. 

Starrett, L. S. Co.Athol, Mass. 

Stetson, John B. Co.Philadelphia, Pa. 

Stetson Shoe Co.South Weymouth, Mass. 

Stephens-Adamson Mfg. Co.Aurora, Ill. 

Stollwerck Chocolate Co.Stamford, Conn. 

Strathmore Paper Co.Mittineague, Mass. 

Stromberg-Carlson Telephone Mfg. Co.. . .Rochester, N. Y. 

Sun Maid Raisin Growers.Fresno, Cal. 

Susquehanna Silk Mills.New York, N. Y. 

Swift & Co.Chicago, Ill. 

Syracuse Chilled Plow Co.Syracuse, N. Y. 


Taylor-Wharton Iron Steel Co.High Bridge, N. J. 

Texas Co.Port Arthur, Texas 

Thew Shovel Co.Lorain, Ohio 

Trenton Potteries Co.Trenton, N. J. 

Trumbull Electric Mfg. Co., The.Plainville, Conn. 

Nathanel Tufts Meter Works.Boston, Mass. 

Underwood Typewriter Co.Hartford, Conn. 

Union Electric Light & Power Co.St. Louis, Mo. 

Union Steel Casting Company.Pittsburgh, Pa. 

United Gas Improvement Co. Inc.Philadelphia, Pa. 

United Shoe Machinery Corp.Beverly, Mass. 

U. S. Envelope Co.Springfield, Mass. 

U. S. Light & Heat Corp.Niagara Falls, N. Y. 

U. S. Rubber Co.New York, N. Y. 

U. S. Steel Corp.New York, N. Y.. 

U. S. Wind Engine & Pump Co.Batavia, Ill. 

Universal Winding Co.Providence, R. I. 

Utah Light & Traction Co.Salt Lake City, Utah 

Van Brunt Mfg. Co.Horicon, Wis. 

Victor Talking Machine Co.Camden, N. J. 

Vilter Mfg. Co.Milwaukee, Wis. 

Vulcan Plow Co.Evansville, Ind 


154 
















































Appendix —Continued 


Name of Company Location 

Wadsworth Watch Case Co.Dayton, Ky. 

Wagner Electric Mfg. Co.St. Louis, Mo. 

Walker & Pratt Mfg. Co.Watertown, Mass. 

Waltham Watch Co...Waltham, Mass 

Walworth Mfg. Co.Kewanee, Ill. 

Walworth Mfg. Co.So. Boston, Mass. 

Warner & Swasey Co.Cleveland, Ohio 

Warren, S. D. Co.Cumberland Mills, Maine 

Washburn-Crosby Co.Minneapolis, Minn. 

Waterbury Clock Co.Waterbury, Conn. 

Wateree Mills.Camden, N. J. 

Weaver Piano Co. Inc.York, Pa. 

Wellman-Seaver-Morgan Co.Cleveland, Ohio 

Wellsville Plate & Sheet Iron Co.Wellsville, Ohio 

Western Maryland Ry. Co.Baltimore, Md. 

Westinghouse Electric & Mfg. Co.E. Pittsburg, Pa. 

Westinghouse Lamp Co.Bloomfield, N J. 

Wheeling Sanitary Mfg. Co.Wheeling, W. Va. 

Wheeling Steel Corp.Wheeling, W. Va. 

Whitcomb Envelope Co.Worcester, Mass. 

White Sewing Machine Co.Cleveland, Ohio 

White & Wyckoff Mfg. Co.Holyoke, Mass. 

Wickwire Spencer Steel Corp.Worcester, Mass. 

Widdicomb, John Co.Grand Rapids, Mich. 

Williams, J. H. & Co.Brooklyn, N. Y. 

Williams White & Co.Moline, Ill. 

Willys-Overland Co.Toledo, Ohio 

Will & Baumer Candle Co. Inc.Syracuse, N. Y. 

Wilson-Jones Loose Leaf Co.Chicago, Ill. 

Wilson & Co..Chicago, Ill. 

Winchester Repeating Arms Co.New Haven, Conn. 

Wolf River Paper & Fiber Co.Shawano, Wis. 

Woodward & Lothrop.Washington, D. C. 

Worcester Pressed Steel Co.Worcester, Mass. 

Worthington Pump & Machinery Corp.. . .New York, N Y. 

Wright’s Underwear Co., Inc.Troy, N. Y. 


Yale & Towne Mfg. Co.Stamford, Conn. 

Youngstown Sheet & Tube Co.Youngstown, Ohio 


155 







































PUBLICATIONS 

OF THE 

NATIONAL INDUSTRIAL CONFERENCE BOARD 

{Prices given are Jor paper-bound copies; cloth binding fifty cents additional) 
RESEARCH REPORTS 

No. 1. Workmen’s Compensation Acts in the United States—The Legal Phase. 60 pages. 
April, 1917. Revised, August, 1919. $1.00. 

No. 2. Analysis of British Wartime Reports on Hours of Work as Related to Output 
and Fatigue. 57 pages. November, 1917. $1.00. 

No. 3. Strikes in American Industry in Wartime—April 6 to October 6, 1917. 20 pages. 

March, 1918. 50 cents. 

No. 4. Hours of Work as Related to Output and Health of Workers—Cotton Manu¬ 
facturing. 64 pages. March, 1918. $1.00. 

No. 5. The Canadian Industrial Disputes Investigation Act. 31 pages. April, 1918. 
Revised and reprinted, April, 1920. 50 cents. 

No. 6. Sickness Insurance or Sickness Prevention? 24 pages. May, 1918. 50 cents. 

No. 7. Hours of Work as Related to Output and Health of Workers—Boot and Shoe 
Industry. 76 pages. June, 1918. $1.00. 

No. 8. Wartime Employment of Women in the Metal Trades. 79 pages. July, 1918. $1.00. 

No. 9. Wartime Changes in the Cost of Living. 78 pages. August, 1918. $1.00. 

No. 10. Arbitration and Wage-Fixing in Australia. 52 pages. October, 1918 $1.00. 

No. 11. The Eight-Hour Day Defined. 9 pages. December, 1918. 50 cents. 

No. 12. Hours of Work as Related to Output and Health of Workers—Wool Manufac¬ 
turing. 69 pages. December, 1918. $1.00. 

No. 13. Rest Periods for Industrial Workers. 55 pages. January, 1919. $1.00. 

No. 14. Wartime Changes in the Cost of Living: July, 1914—November 1918. 33 pages. 
February, 1919. 75 cents. 

No. 15. Problems of Industrial Readjustment in the United States. 58 pages. February, 
1919. $1.00. 

No. 16. Hours of Work as Related to Output and Health of Workers—Silk Manufac¬ 
turing. 54 pages. March, 1919. $1.00. 

No. 17. Wartime Changes in the Cost of Living: July, 1914 —March, 1919. 31 pages. May, 
1919. 75 cents. 

No. 18. Hours of Work as Related to Output and Health of Workers—Metal Manufac¬ 
turing Industries. 62 pages. July, 1919. $1.00. 

No. 19. Changes in the Cost of Living: July, 1914 —July, 1919. 31 pages. September, 

1919. 75 cents. 

No. 20. Wartime Changes in Wages: September, 1914 —March, 1919. 128 pages. Septem¬ 

ber, 1919. $1.50. 

No. 21. Works Councils in the United States. 135 pages. October, 1919. $1.50. 

No. 22. The Cost of Living Among Wage Earners—Fall River, Massachusetts, October, 
1919. 18 pages. November, 1919. 50 cents. 

No 23. Conciliation and Arbitration in New Zealand. 46 pages. December, 1919. $1.00. 

No 24. The Cost of Living Among Wage Earners—Lawrence, Massachusetts, November, 
1919. 21 pages. December, 1919. 50 cents. 

No. 25. Changes in the Cost of Living: July, 1914 —November, 1919. 24 pages December, 
1919. 75 cents. 

No. 26. A Works Council Manual. 32 pages. February, 1920. $1.00. 

No. 27. The Hours of Work Problem in Five Major Industries. 91 pages. March, 1920. $1.00. 

No. 28. Changes in the Cost of Living: July, 1914 —March, 1920. 24 pages. May, 1920. 75 cents. 

No. 29. Practical Experience with Profit Sharing in Industrial Establishments. 86 pages. 
June, 1920. $1.00. 

No. 30. Changes in the Cost of Living: July, 1914 —July, 1920. 28 pages. September, 1920. 

75 cents. 

No. 31. Changes in Wages During and Since the War: September, 1914 —March, 1920. 53 
pages. September, 1920. $1.00. 

No. 32. Practical Experience with the Work Week of Forty-Eight Hours or Less. 
88 pages. December, 1920. $1.00. 


RESEARCH REPORTS— continued 

No. 33. Changes in the Cost of Living: July, 1914 —November, 1920. 29 pages. December, 

1920. 75 cents. 

No. 34. Health Service in Industry. 61 pages. January, 1921. $1.00. 

No. 35. Wage Changes in Industry: September, 1914 —December, 1920. 50 pages. March, 

1921. $1.00. 

No. 36. Changes in the Cost of Living: July, 1914 —March, 1921. 28 pages. April, 1921. 
75 cents. 

No. 37. Cost of Health Service in Industry. 33 pages. May, 1921. $1.00 

No. 38. Experience with Trade Union Agreements—Clothing Industries. 134 pages. June, 

1921. $1.50. 

No. 39. Changes in the Cost of Living: July, 1914 —July, 1921. 25 pages. August, 1921. 
75 cents. 

No. 40. Wages in Great Britain, France and Germany. 110 pages. August, 1921. $1.50. 
No. 41. Family Budgets of American Wage-Earners: A Critical Analysis. 97 pages. Sep¬ 
tember, 1921. $1.00. 

No. 42. The Metric versus the English System of Weights and Measures. 261 pages. Octo¬ 
ber, 1921. $2.50. 

No. 43. The Unemployment Problem. 91 pages. November, 1921. $1.00. 

No. 44. Changes in the Cost of Living: July, 1914—November, 1921. 30 pages. Decem¬ 
ber, 1921. 75 cents. 

No. 45. Wages and Hours in American Industry: July, 1914 —July, 1921. 202 pages. De¬ 

cember, 1921. $2.00. 

No. 46. Railroad Wages and Working Rules. 130 pages. February, 1922. $2.00. 

No. 47. Wages and Hours in Anthracite Mining: June, 1914 —October, 1921, Inclusive. 
67 pages. March, 1922. $1.50. 

No. 48. The International Labor Organization of the League of Nations. 159 pages. 
April, 1922. $2.00. 

No. 49. Changes in the Cost of Living: July, 1914 —March, 1922. 33 pages April, 1922. 
75 cents. 

No. 50. Experience with Works Councils in the United States. 191 pages. May, 1922. $2.00 
No. 51. Unemployment Insurance in Theory and Practice. 127 pages. June, 1922. $1.50. 

No. 52. Wages and Hours in American Manufacturing Industries: July, 1914 —January, 

1922. 235 pages. July, 1922. $2.00. 

No. 53. Wages in Foreign Countries. 131 pages. August .1922. $1.50 

No. 54. Changes in the Cost of Living: July, 1914— July, 1922. 34 pages. August, 1922. 
75 cents. 

No. 55. Taxation and National Income. 86 pages. October, 1922. $1.50. 

No. 56. The Consolidation of Railroads in the United States. 107 pages. November, 

1922. $2.00. 

No. 57. Changes in the Cost of Living: July, 1914— November, 1922. 37 pages. Decem¬ 
ber, 1922. 75 cents. 

No. 58. The Immigration Problem in the United States. 130 pages. May, 1923. $1.50. 

No. 59. Wages, Hours and Employment in American Manufacturing Industries: July, 

1914 _January, 1923, With Supplemental Data up to April, 1923. 160 pages. May, 1923. 

$ 2 . 00 . 

No. 60. Changes in the Cost of Living: July, 1914— March, 1923. 34 pages. May, 1923. 
75 cents. 

No. 61. Workmen’s Compensation Acts in the United States: The Medical Aspect. 285 
pages, with index. August, 1923. $3.00. 

No. 62. Wages, Hours and Employment in American Manufacturing Industries: July, 
1914 —July, 1923. 154 pages. September, 1923. $2.00. 

No. 63. Changes in the Cost of Living: July, 1914— July, 1923. 36 pages. September, 1923. 
75 cents. 

No. 64. Tax Burdens and Exemptions. 130 pages. October, 1923. $2.00. 

No. 65. Experience with Mutual Benefit Associations in the United States. 155 pages. 
December, 1923. $1.50. 


SPECIAL REPORTS 

No. 1. A Case or Federal Propaganda in Our Public Schools: Some Criticisms or 
“Lessons in Community and National Lite,” Issued by the U. S. Bureau or Education. 
13 pages. February, 1919. 50 cents. 

No. 2. War Revenue Act or 1918: A Briep Analysis. 18 pages. March 14, 1919. 50 cents. 

'No. 3. Interim Report or the European Commission or the National Industrial Coneer- 
ence Board. 34 pages. July, 1919. 50 cents. 

No. 4. Is Compulsory Health Insurance Desirable ? 12 pages. October, 1919. 50 cents. 

No. 5. The Vital Issues in the Industrial Conference at Washington, D. C.: October 6-23, 
1919. 15 pages. November, 1919. 50 cents. 

No. 6. Problems or Labor and Industry in Great Britain, France, and Italy. Report or 
the European Commission. 406 pages. November, 1919. $2.50. 

No. 7. The Cost or Living Among Wage Earners—North Hudson County, New Jersey, 
January, 1920. 20 pages. March, 1920. 50 cents. 

No. 8. The Cost or Living Among Wage Earners—Greenville and Pelzer, So. Carolina, 
and Charlotte, No. Carolina, January and February, 1920. 25 pages. May, 1920. 50 cents. 
No. 9. Proceedings or the National Industrial Tax Coneerence at Chicago, Illinois. 
April 16, 1920. 113 pages. May, 1920. $1.00. 

No. 10. Should Trade Unions and Employers’ Associations Be Made Legally Responsible ? 

(Prize Essays, 1919-1920.) 35 pages. June, 1920. 75 cents. 

No. 11. The Closed Union Shop versus the Open Shop : Their Social and Economic Value 
Compared. (Prize Essays, 1919-1920.) 27 pages. July, 1920. 75 cents. 

No. 12. Should the State Interpere in the Determination or Wage Rates ? (Prize Essays, 
1919-1920.) 158 pages. August, 1920. $1.50. 

No. 13. The Cost or Living Among Wage Earners—Cincinnati, Ohio, May, 1920. 18 pages. 

July, 1920. 50 cents. 

No. 14. Unwarranted Conclusions Regarding the Eight-Hour and Ten-Hour Workday: A 
Critical Review or ... U.S. Public Health Bull. No. 106. 21 pages. August, 1920. 50 cents. 
No. 15. Problems or Labor and Industry in Germany. 65 pages. September, 1920. $1.00. 
No. 16. The Cost or Living Among Wage Earners—Worcester, Massachusetts, June, 1920. 
16 pages. October, 1920. 50 cents. 

No. 17. Proceedings or the Second National Industrial Tax Coneerence, New York City, 
October 22 and 23, 1920. 200 pages. December, 1920. $1.50. 

No. 18. Report or the Tax Committee or the National Industrial Coneerence Board, on 
the Federal Tax Problem. 58 pages. December, 1920. 75 cents. 

No. 19. The Cost or Living Among Wage Earners—Detroit, Michigan, September, 1921. 
22 pages. October, 1921. 50 cents. 

No. 20. A Digest or “The Metric versus the English System or Weights and Measures” 
(Research Report No. 42). 11 pages. December, 1921. 25 cents. 

No. 21. The Cost or Living Among Wage Earners—Anthracite Region or Pennsylvania, 
February, 1922. 41 pages. April, 1922. 75 cents. 

No. 22. The Physician in Industry: A Symposium. 98 pages. June, 1922. $1.00. 

No. 23. The Present Railroad Situation. 32 pages. August, 1923. 50 cents. 

No. 24. The Soldier’s Bonus, or Adjusted Compensation for Soldiers. 46 pages. August, 
1923. 50 cents. 

No. 25. Engineering Education and American Industry. 25 pages. August, 1923. 50 cents. 


INDUSTRIAL NEWS SURVEY 

Important industrial news in concise form. A digest of industrial 
news and comment as published in reliable newspapers, magazines, 
reviews, special articles, and government documents. 

Weekly. $2.00 per year 

WALL CHART SERVICE 

Graphic presentation of vital and outstanding facts of industrial- 
economic conditions and movements in the United States and foreign 
countries, based on the Board’s investigations and on other reliable 
sources# 

Single charts (18" x 24") $1.00 each 

Sets of fifty consecutive charts $37.50 per set 


A GRAPHIC ANALYSIS 

OF THE 

CENSUS OF MANUFACTURES 

A Special Volume of 120 Multi-Colored Plates, 
with Concise Text and Tabulations, Presenting 
in Condensed and Graphic Form Basic Information 
on Personnel, Production, Expenditures, Wages, 
Taxes, Hours of Work, Power and Fuel in All 
Important American Industries During the Past 
Seventy Years. 

274 pages. Levant bound, $ 7.50 
















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